SECOND DIVISION Intending to turn the fan off, he followed the sound that led
him to the plant's "Tool and Die" section.
G.R. No. 194884, October 22, 2014
IMASEN PHILIPPINE MANUFACTURING
CORPORATION, Petitioner, v. RAMONCHITO T. ALCON
AND JOANN S. PAPA, Respondents.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari1 the
challenge to he June 9, 2010 decision2 and the December
22, 2010 resolution3 of the Court of Appeals (CA) in CA-G.R.
SP No. 110327. This CA decision nullified the December 24,
2008 decision4 of the National Labor Relations
Commission (NLRC) in NLRC CA No. 043915-05 (NLRC CASE
No. RAB IV-12-1661-02-L). The NLRC ruling, in turn,
affirmed the December 10, 2004 decision5 of the Labor
Arbiter (LA), dismissing the illegal dismissal complaint filed
by respondents Ramonchito T. Alcon and Joann
S. Papa (collectively referred to as respondents).
The Factual Antecedents
Petitioner Imasen Philippine Manufacturing Corporation is a
domestic corporation engaged in the manufacture of auto
seat-recliners and slide-adjusters. It hired the respondents
as manual welders in 2001.
On October 5, 2002, the respondents reported for work on
the second shift - from 8:00 pm to 5:00 am of the following
day. At around 12:40 am, Cyrus A. Altiche, Imasen's
security guard on duty, went to patrol and inspect the
production plant's premises. When Altiche reached Imasen's
Press Area, he heard the sound of a running industrial fan.
At the "Tool and Die" section, Altiche saw the respondents
having sexual intercourse on the floor, using a piece of
carton as mattress. Altiche immediately went back to the
guard house and relayed what he saw to Danilo S. Ogana,
another security guard on duty.
On Altiche's request, Ogana made a follow-up inspection.
Ogana went to the "Tool and Die" section and saw several
employees, including the respondents, already leaving the
area. He noticed, however, that Alcon picked up the carton
that Altiche claimed the respondents used as mattress
during their sexual act, and returned it to the place where
the cartons were kept. Altiche then submitted a handwritten
report6 of the incident to Imasen's Finance and
Administration Manager.
On October 14, 2002, Imasen issued the respondents
separate interoffice memoranda7 informing them of Altiche's
report on the October 5, 2002 incident and directing them
to submit their individual explanation. The respondents
complied with the directive; they claimed that they were
merely sleeping in the "Tool and Die" section at the time of
the incident. They also claimed that other employees were
near the area, making the commission of the act charged
impossible.
On October 22, 2002, Imasen issued the respondents
another interoffice memorandum8 directing them to appear
at the formal hearing of the administrative charge against
them. The hearing was conducted on October 30,
2002,9 presided by a mediator and attended by the
representatives of Imasen, the respondents, Altiche and
Ogana. Altiche and Ogana reiterated the narrations in
Altiche's handwritten report.
On December 4, 2002, Imasen issued the respondents
separate interoffice memoranda10 terminating their services.
It found the respondents guilty of the act charged which it
considered as "gross misconduct contrary to the existing
policies, rules and regulations of the company."
On December 5, 2002, the respondents filed before the LA
the complaint11 for illegal dismissal. The respondents
maintained their version of the incident.
In the December 10, 2004 decision,12 the LA dismissed the
respondents' complaint for lack of merit. The LA found the
respondents' dismissal valid, i.e., for the just cause of gross
misconduct and with due process. The LA gave weight to
Altiche's account of the incident, which Ogana corroborated,
over the respondents' mere denial of the incident and the
unsubstantiated explanation that other employees were
present near the "Tool and Die" section, making the sexual
act impossible. The LA additionally pointed out that the
respondents did not show any ill motive or intent on the
part; of Altiche and Ogano sufficient to render their
accounts of the incident suspicious.
The NLRC"s ruling
In its December 24, 2008 decision,13 the NLRC dismissed
the respondents' appeal14 for lack of merit. In affirming the
LA's ruling, the NLRC declared that Imasen substantially
and convincingly proved just cause for dismissing the
respondents and complied with the required due process.
The respondents filed before the CA a petition
for certiorari15 after the NLRC denied their motion for
reconsideration16 in its May 29, 2009 resolution.17cralawred
The CA's ruling
In its June 9, 2010 decision,18 the CA nullified the NLRC's
ruling. The CA agreed with the labor tribunals' findings
regarding the infraction charged - engaging in sexual
intercourse on October 5, 2002 inside company premises -
and Imasen's observance of due process in dismissing the
respondents from employment.
The CA, however, disagreed with the conclusion that the
respondents' sexual intercourse inside company premises
constituted serious misconduct that the Labor Code
considers sufficient to justify the penalty of dismissal. The
CA pointed out that the respondents' act, while provoked by
"reckless passion in an inviting environment and time," was
not done with wrongful intent or with the grave or
aggravated character that the law requires. To the CA, the
penalty of dismissal is not commensurate to the
respondents' act, considering especially that the
respondents had not committed any infraction in the past.
Accordingly, the CA reduced the respondents' penalty to a
three-month suspension and ordered Imasen to: (1)
reinstate the respondents to their former position without
loss of seniority rights and other privileges; and (2) pay the
respondents backwages from December 4, 2002 until actual
reinstatement, less the wages corresponding to the three-
month suspension.
Imasen filed the present petition after the CA denied its
motion for reconsideration19 in the CA's December 22, 2010
resolution.20cralawred
The Petition
Imasen argues in this petition that the act of engaging in
sexual intercourse inside company premises during work
hours is serious misconduct by whatever standard it is
measured. According to Imasen, the respondents' infraction
is an affront to its core values and high ethical work
standards, and justifies the dismissal. When the CA reduced
the penalty from dismissal to three-month suspension,
Imasen points out that the CA, in effect, substituted its own
judgment with its (Imasen's) own legally protected
management prerogative.
Lastly, Imasen questions the CA's award of backwages in
the respondents' favor. Imasen argues that the respondents
would virtually gain from their infraction as they would be
paid eight years worth of wages without having rendered
any service; eight (8) years, in fact, far exceeds their actual
period of service prior to their dismissal.
The Case for the Respondents
The respondents argue in their comment21 that the
elements of serious misconduct that justifies an employee's
dismissal are absent in this case, adopting thereby the CA's
ruling. Hence, to the respondents, the CA correctly reversed
the NLRC's ruling; the CA, in deciding the case, took a
wholistic consideration of all the attendant facts, i.e., the
time, the place, the persons involved, and the surrounding
circumstances before, during, and after the sexual
intercourse, and not merely the infraction committed.
The Issue
The sole issue for this Court's resolution is whether the
respondents' infraction — engaging in sexual intercourse
inside company premises during work hours — amounts to
serious misconduct within the terms of Article 282 (now
Article 296) of the Labor Code justifying their dismissal.
The Court's Ruling
We GRANT the petition.
We find that the CA reversibly erred when it nullified the
NLRC's decision for grave abuse of discretion the NLRC's
decision.
Preliminary considerations:
tenurial security vis-a-vis
management prerogative
The law and jurisprudence guarantee to every employee
security of tenure. This textual and the ensuing
jurisprudential commitment to the cause and welfare of the
working class proceed from the social justice principles of
the Constitution that the Court zealously implements out of
its concern for those with less in life. Thus, the Court will
not hesitate to strike down as invalid any employer act that
attempts to undermine workers' tenurial security. All these
the State undertakes under Article 279 (now Article
293)22 of the Labor Code which bar an employer from
terminating the services of an employee, except for just or
authorized cause and upon observance of due process.
In protecting the rights of the workers, the law, however,
does not authorize the oppression or self-destruction of the
employer.23 The constitutional commitment to the policy of
social justice cannot be understood to mean that every
labor dispute shall automatically be decided in favor of
labor.24 The constitutional and legal protection equally
recognize the employer's right and prerogative to manage
its operation according to reasonable standards and norms
of fair play.
Accordingly, except as limited by special law, an employer is
free to regulate, according to his own judgment and
discretion, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of
work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of
employees, worker supervision, layoff of workers and the
discipline, dismissal and recall of workers. 25 As a
general proposition, an employer has free reign over every
aspect of its business, including the dismissal of his
employees as long as the exercise of its management
prerogative is done reasonably, in good faith, and in a
manner not otherwise intended to defeat or circumvent the
rights of workers.
In these lights, the Court's task in the present petition is to
balance the conflicting rights of the respondents to security
of tenure, on one hand, and of Imasen to dismiss erring
employees pursuant to the legitimate exercise of its
management prerogative, on the other.
Management's right to dismiss an
employee; serious misconduct as just
cause for the dismissal
The just causes for dismissing an employee are provided
under Article 28226 (now Article 296)27 of the Labor Code.
Under Article 282(a), serious misconduct by the employee
justifies the employer in terminating his or her employment.
Misconduct is defined as an improper or wrong conduct. It is
a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in
judgment.28 To constitute a valid cause for the dismissal
within the text and meaning of Article 282 of the Labor
Code, the employee's misconduct must be serious, i.e., of
such grave and aggravated character and not merely
trivial or unimportant.29cralawred
Additionally, the misconduct must be related to the
performance of the employee's duties showing him to
be unfit to continue working for the
employer.30 Further, and equally important and required,
the act or conduct must have been performed with
wrongful intent.31cralawred
To summarize, for misconduct or improper behavior to be a
just cause for dismissal, the following elements must
concur: (a) the misconduct must be serious; (b) it must
relate to the performance of the employee's duties showing
that the employee has become unfit to continue working for
the employer;32and (c) it must have been performed with
wrongful intent.
The respondents' infraction amounts to
serious misconduct within the terms of
Article 282 (now Article 296) of the
Labor Code justifying their dismissal
Dismissal situations (on the ground of serious misconduct)
involving sexual acts, particularly sexual intercourse
committed by employees inside company premises and
during work hours, are not usual violations33 and are not
found in abundance under jurisprudence. Thus, in resolving
the present petition, we are largely guided by the principles
we discussed above, as applied to the totality of the
circumstances that surrounded the petitioners' dismissal.
In other words, we view the petitioners' act from the prism
of the elements that must concur for an act to constitute
serious misconduct, analyzed and understood within the
context of the overall circumstances of the case. In taking
this approach, we are guided, too, by the jurisdictional
limitations that a Rule 45 review of the CA's Rule 65
decision in labor cases imposes on our
discretion.34cralawred
In addressing the situation that we are faced with in this
petition, we determine whether Imasen validly exercised its
prerogative as employer to dismiss the respondents-
employees who, within company premises and during work
hours, engaged in sexual intercourse. As framed within our
limited Rule 45 jurisdiction, the question that we ask
is: whether the NLRC committed grave abuse of discretion
in finding that the respondents' act amounted to what
Article 282 of the Labor Code textually considers as serious
misconduct to warrant their dismissal.
After due consideration, we find the NLRC legally correct
and well within its jurisdiction when it affirmed the validity
of the respondents' dismissal on the ground of serious
misconduct.
Sexual acts and intimacies between two consenting adults
belong, as a principled ideal, to the realm of purely private
relations. Whether aroused by lust or inflamed by sincere
affection, sexual acts should be carried out at such place,
time and circumstance that, by the generally accepted
norms of conduct, will not offend public decency nor disturb
the generally held or accepted social morals. Under these
parameters, sexual acts between two consenting adults do
not have a place in the work environment.
Indisputably, the respondents engaged in sexual
intercourse inside company premises and during work
hours. These circumstances, by themselves, are already
punishable misconduct. Added to these considerations,
however, is the implication that the respondents did not
only disregard company rules but flaunted their disregard in
a manner that could reflect adversely on the status of ethics
and morality in the company.
Additionally, the respondents engaged in sexual intercourse
in an area where co-employees or other company personnel
have ready and available access. The respondents likewise
committed their act at a time when the employees were
expected to be and had, in fact, been at their respective
posts, and when they themselves were supposed to be, as
all other employees had in fact been, working.
Under these factual premises and in the context of legal
parameters we discussed, we cannot help but consider the
respondents' misconduct to be of grave and aggravated
character so that the company was justified in imposing the
highest penalty available — dismissal. Their infraction
transgressed the bounds of socially and morally accepted
human public behavior, and at the same time showed
brazen disregard for the respect that their employer
expected of them as employees. By their misconduct, the
respondents, in effect, issued an open invitation for others
to commit the same infraction, with like disregard for their
employer's rules, for the respect owed to their employer,
and for their co-employees' sensitivities. Taken together,
these considerations reveal a depraved disposition that the
Court cannot but consider as a valid cause for dismissal.
In ruling as we do now, we considered the balancing
between the respondents' tenurial rights and the petitioner's
interests - the need to defend their management
prerogative and to maintain as well a high standard of
ethics and morality in the workplace. Unfortunately for the
respondents, in this balancing under the circumstances of
the case, we have to rule against their tenurial rights in
favor of the employer's management rights.
All told, the respondents' misconduct, under the
circumstances of this case, fell within the terms of Article
282 (now Article 296) of the Labor Code. Consequently, we
reverse the CA's decision for its failure to recognize that no
grave abuse of discretion attended the NLRC's decision to
support the respondents' dismissal for serious misconduct.
WHEREFORE, in light of these considerations, we
hereby GRANT the petition. We REVERSE the decision
dated June 9, 2010 and the resolution dated December 22,
2010 of the Court of Appeals in CA-G.R. SP No. 110327
and REINSTATE the decision dated December 24, 2008 of
the National Labor Relations Commission in NLRC CA No.
043915-05 (NLRC Case No. RAB IV-12-1661-02-L).
SO ORDERED.
 Republic of the Philippines (b) ORDERING Respondents jointly and solidarily to pay
SUPREME COURT Complainants separation pay in lieu of reinstatement
Manila computed on the basis of one (1) month pay for every
year of service from date of employment up to November
THIRD DIVISION 29, 2006 (the date of complainants illegal dismissal);

G.R. No. 193789 September 19, 2012 (c) ORDERING Respondents jointly and solidarily to pay
Complainants backwages from November 29, 2006 up to
ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. the finality of this Decision;
CRUZ, ROSEMARIE P. PIMENTEL, and ROWENA B.
BARDAJE, Petitioners, (d) ORDERING the Respondents jointly and solidarily to
vs. pay Complainants the following:
BIOMEDICA HEALTH CARE, INC. and CARINA "KAREN" J.
MOTOL, Respondents. 1. Unpaid salary for the period 08-15 November
2006;
DECISION
2. Pro-rated 13th month pay for 2006;
VELASCO, JR., J.:
3. Service Incentive Leave for 2006 (except for
The Case complainant Bardaje );

This Petition for Review on Certiorari under Rule 45 seeks to 4. Unpaid commissions based on their sales for
annul the June 25, 20101 the years 2005 and 2006; and

Decision and September 20, 20102 Resolution of the Court of
Appeals (CA) in CA-G.R. SP No. 108205, finding that petitioners
were validly dismissed. The CA Decision overturned the Decision
dated November 21, 20083 of the National Labor Relations
Commission (NLRC) and reinstated the Decision dated March 31,
20084 of Labor Arbiter Ligerio V. Ancheta.
5. Nominal damages in the amount of PhP 30,000
each.
(e) ORDERING the Respondents jointly and solidarily to
pay Complainants attorney's fees in the amount of I 0% of
the total award of monetary claims.

WHEREFORE, in view of the foregoing, judgment is hereby
rendered modifying the assailed Decision of the Labor Arbiter
dated March 31, 2008;
(a) DECLARING the Complainants to have been illegally
dismissed for lack of just cause;
All other claims and counterclaims are dismissed for lack of
factual and legal basis.
The NLRC is ordered to recompute the monetary awards due to
petitioners based on the aforelisted dispositions deducting from
the awards to Naranjo and Pimentel their cash advances of Ph₱
4,750.00 and Ph₱ 4,500.00, respectively.

SO ORDERED.

No costs.

SO ORDERED.
 FIRST DIVISION
G.R. No. 220998, August 08, 2016
HOLCIM PHILIPPINES, INC., Petitioner, v. RENANTE J.
OBRA, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari,1 filed
by petitioner Holcim Philippines, Inc. (petitioner), assailing
the Decision2 dated February 13, 2015 and the
Resolution3 dated September 7, 2015 of the Court of
Appeals (CA) in CA-G.R. SP No. 136413, which affirmed the
Decision4 dated March 31, 2014 and the Resolution5 dated
April 30, 2014 of the National Labor Relations Commission
(NLRC) in NLRC LAC No. 03-000696-14(8) / NLRC CN. RAB-
I-09-1102-13(LU-l), holding that respondent Renante J.
Obra (respondent) was illegally dismissed and, thereby,
ordering petitioner to pay him separation pay amounting to
P569,772.00 in lieu of reinstatement.
The Facts
Respondent was employed by petitioner as packhouse
operator in its La Union Plant for nineteen (19) years, from
March 19, 19946 until August 8, 2013.7 As packhouse
operator, respondent ensures the safe and efficient
operation of rotopackers, auto-bag placers, and cariramats,
as well as their auxiliaries.8 At the time of his dismissal, he
was earning a monthly salary of P29,988.00.9chanrobleslaw
On July 10, 2013, at around 4 o'clock in the afternoon,
respondent was about to exit Gate 2 of petitioner's La Union
Plant when the security guard on duty, Kristian Castillo
(Castillo), asked him to submit himself and the backpack he
was carrying for inspection.10 Respondent refused and
confided to Castillo that he has a piece of scrap electrical
wire in his bag.11 He also requested Castillo not to report
the incident to the management, and asked the latter if
respondent could bring the scrap wire outside the company
premises; otherwise, he will return it to his locker in the
Packhouse Office.12 However, Castillo did not agree, which
prompted respondent to turn around and hurriedly go back
to the said office where he took the scrap wire out of his
bag.13 Soon thereafter, a security guard arrived and
directed him to go to the Security Office where he was
asked to write a statement regarding the
incident.14chanrobleslaw
In his statement,15 respondent admitted the incident, but
asserted that he had no intention to steal.16He explained
that the 16-meter electrical wire was a mere scrap that he
had asked from the contractor who removed it from the
Packhouse Office.17 He also averred that as far as he knows,
only scrap materials which are to be taken out of the
company premises in bulk required a gate pass and that he
had no idea that it was also necessary to takeout a piece of
loose, scrap wire out of the company's
premises.18 Respondent also clarified that he hurriedly
turned around because he had decided to just return the
scrap wire to the said office.19chanrobleslaw
On July 16, 2013, respondent received a Notice of
Gap20 requiring him to explain within five (5) days
therefrom why no disciplinary action, including termination,
should be taken against him on account of the above-
mentioned incident.21 He was also placed on preventive
suspension for thirty (30) days effective immediately.22 In a
statement23 dated July 23, 2013, respondent reiterated that
he had no intention to steal from petitioner and that the
scrap wire which he had asked from a contractor was
already for disposal anyway.24 He also expressed his
remorse over the incident and asked that he be given a
chance to correct his mistake.25cralawred Meetings of
petitioner's Review Committee were thereafter conducted,
with respondent and the security guards concerned in
attendance.26chanrobleslaw
On August 8, 2013, petitioner issued a Decision/Resolution
Memo27 dismissing from service respondent for serious
misconduct.28 Petitioner found no merit in respondent's
claim that he was unaware that a gate pass is required to
take out a piece of scrap wire, pointing out that the same is
incredulous since he had been working thereat for nineteen
(19) years already.29 It also drew attention to the fact that
respondent refused to submit his bag for inspection, which,
according to petitioner, confirmed his intention to take the
wire for his personal use.30 Further, petitioner emphasized
that respondent's actions violated its rules which, among
others, limit the use of company properties for business
purposes only and mandate the employees, such as
respondent, to be fair, honest, ethical, and act responsibly
and with integrity.31chanrobleslaw
In a letter32 dated August 14, 2013, respondent sought
reconsideration and prayed for a lower penalty, especially
considering the length of his service to it and the lack of
intent to steal.33 However, in a Memo34 dated August 28,
2013, petitioner denied respondent's appeal. Hence, on
September 30, 2013, respondent filed a complaint35 before
the NLRC for illegal dismissal and money claims, docketed
as NLRC Case No. (CN) RAB-I-09-1102-13(LU-l), averring
that the penalty of dismissal from service imposed upon him
was too harsh since he had acted in good faith in taking the
piece of scrap wire.36 Respondent maintained that there was
no wrongful intent on his part which would justify his
dismissal from service for serious misconduct, considering
that the contractor who removed it from the Packhouse
Office led him to believe that the same was already for
disposal.37chanrobleslaw
Meanwhile, petitioner countered that respondent's taking of
the electrical wire for his personal use, without authority
from the management, shows his intent to gain.38 In
addition to this, it was highlighted that respondent refused
to submit himself and his bag for inspection and attempted
to corrupt Castillo by convincing him to refrain from
reporting the incident to the management.39 These, coupled
with his sudden fleeing from Gate 2, bolster the charge of
serious misconduct against him.40 With respect to
respondent's claim that the contractor who removed the
wire from the Packhouse Office led him to believe that the
same was already for disposal, petitioner pointed out that
the contractor's personnel have issued statements belying
respondent's claim and categorically stated that they did not
give away any electrical wire to anyone.41chanrobleslaw
The Labor Arbiter's Ruling
In a Decision42 dated January 24, 2014, the Labor Arbiter
(LA) dismissed respondent's complaint and held that the
latter was validly dismissed from service by petitioner for
committing the crime of theft, and therefore, not entitled to
reinstatement, backwages, and other money
claims.43chanrobleslaw
The NLRC Ruling
In a Decision44 dated March 31, 2014, the NLRC reversed
the LA's ruling and held that the penalty of dismissal from
service imposed upon respondent was unduly harsh since
his misconduct was not so gross to deserve such
penalty.45 It found merit in respondent's defense that he
took the scrap wire on the belief that it was already for
disposal, noting that petitioner never denied the
same.46 The NLRC also emphasized that petitioner did not
suffer any damage since respondent was not able to take
the wire outside the company premises.47 Moreover, he did
not hold a position of trust and confidence and was
remorseful of his mistake, as evidenced by his repeated
pleas for another chance.48 These, coupled with the fact that
he had been in petitioner's employ for nineteen (19) years,
made respondent's dismissal from service excessive and
harsh.49 Considering, however, the strained relations
between the parties, the NLRC awarded separation pay in
favor of respondent in lieu of reinstatement. 50chanrobleslaw
Petitioner moved for reconsideration,51 which was, however,
denied in a Resolution52 dated April 30, 2014.
The CA Ruling
In a Decision53 dated February 13, 2015, the CA dismissed
the petition for certiorari and affirmed the ruling of the
NLRC. It agreed with the NLRC's observation that
respondent was illegally dismissed, pointing out that
petitioner failed to prove that it prohibited its employees
from taking scrap materials outside the company premises.
Besides, respondent's taking of the scrap wire did not relate
to the performance of his work as packhouse
operator.54chanrobleslaw
The CA also drew attention to respondent's unblemished
record in the company where he had been employed for
nineteen (19) years already, adding too that bad faith
cannot be ascribed to him since he volunteered the
information about the scrap wire to Castillo and offered to
return the same if it was not possible to bring it outside of
the company premises.55 According to the CA, respondent's
acts only constituted a lapse in judgment which does not
amount to serious misconduct that would warrant his
dismissal from service.56chanrobleslaw
Dissatisfied, petitioner moved for reconsideration,57 which
was denied by the CA in its Resolution58 dated September 7,
2015; hence, the present petition.
The Issue Before the Court
The sole issue for the Court's resolution is whether or not
the CA erred in affirming the ruling of the NLRC.
The Court's Ruling
The petition is partly meritorious.
There is no question that the employer has the inherent
right to discipline, including that of dismissing its employees
for just causes.59 This right is, however, subject to
reasonable regulation by the State in the exercise of its
police power.60 Accordingly, the finding that an employee
violated company rules and regulations is subject to
scrutiny by the Court to determine if the dismissal is
justified and, if so, whether the penalty imposed is
commensurate to the gravity of his offense.61chanrobleslaw
In this case, the Court agrees with the CA and the NLRC
that respondent's misconduct is not so gross as to deserve
the penalty of dismissal from service. As correctly observed
by the NLRC, while there is no dispute that respondent took
a piece of wire from petitioner's La Union Plant and tried to
bring it outside the company premises, he did so in the
belief that the same was already for disposal. Notably,
petitioner never denied that the piece of wire was already
for disposal and, hence, practically of no value. At any rate,
petitioner did not suffer any damage from the incident,
given that after being asked to submit himself and his bag
for inspection, respondent had a change of heart and
decided to just return the wire to the Packhouse Office.
Respondent has also shown remorse for his mistake,
pleading repeatedly with petitioner to reconsider the penalty
imposed upon him.62chanrobleslaw
Time and again, the Court has held that infractions
committed by an employee should merit only the
corresponding penalty demanded by the
circumstance.63 The penalty must be commensurate with
the act, conduct or omission imputed to the
employee.64chanrobleslaw
In Sagales v. Rustan 's Commercial Corporation,65 the
dismissal of a Chief Cook who tried to take home a pack of
squid heads, which were considered as scrap goods and
usually thrown away, was found to be excessive. In arriving
at such decision, the Court took into consideration the fact
that the Chief Cook had been employed by the company for
31 years already and the incident was his first offense.
Besides, the value of the squid heads was a negligible sum
of P50.00 and the company practically lost nothing since the
squid heads were considered scrap goods and usually
thrown away. Moreover, the ignominy he suffered when he
was imprisoned over the incident, and his preventive
suspension for one (1) month was enough punishment for
his infraction.
Similarly, in Farrol v. CA,M66 a district manager of a bank
was dismissed after he incurred a shortage of P5 0,985.3 7,
which sum was used to pay the retirement benefits of five
(5) employees of the bank. Despite being able to return
majority of the missing amount, leaving a balance of only
P6,995.37, the district manager was dismissed on the
ground that under the bank's rules, the penalty therefor is
dismissal. According to the Court, the "dismissal imposed on
[him] is unduly harsh and grossly disproportionate to the
infraction which led to the termination of his services. A
lighter penalty would have been more just, if not
humane,"67 considering that it was his first infraction and he
has rendered 24 years of service to the bank.
Meanwhile, in the earlier case of Associated Labor Unions-
TUCP v. NLRC,68 the dismissal of an employee, who was
caught trying to take a pair of boots, an empty aluminum
container, and 15 hamburger patties, was considered
excessive. The Court ruled that the employee's dismissal
would be disproportionate to the gravity of the offense
committed, considering the value of the articles he pilfered
and the fact that he had no previous derogatory record
during his two (2) years of employment in the company.
According to the Court, while the items taken were of some
value, such misconduct was not enough to warrant his
dismissal.
As in the foregoing cases, herein respondent deserves
compassion and humane understanding more than
condemnation, especially considering that he had been in
petitioner's employ for nineteen (19) years already, and this
is the first time that he had been involved in taking
company property, which item, at the end of the day, is
practically of no value. Besides, respondent did not occupy
a position of trust and confidence, the loss of which would
have justified his dismissal over the incident. As packhouse
operator, respondent's duties are limited to ensuring the
safe and efficient operation of rotopackers, auto-bag
placers, and cariramats, as well as their auxiliaries. 69 He is
not a managerial employee vested with the powers or
prerogatives to lay down management policies and to hire,
transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such
managerial actions, or one who, in the normal and routine
exercise of his functions, regularly handles significant
amounts of money or property. 70chanrobleslaw
Neither can respondent's infraction be characterized as a
serious misconduct which, under Article 282 (now Article
297) of the Labor Code,71 is a just cause for dismissal.
Misconduct is an improper or wrong conduct, or a
transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in
judgment.72 To constitute a valid cause for dismissal within
the text and meaning of Article 282 (now Article 297) of the
Labor Code, the employee's misconduct must be
serious, i.e., of such grave and aggravated character and
not merely trivial or unimportant,73 as in this case where
the item which respondent tried to takeout was practically
of no value to petitioner. Moreover, ill will or wrongful intent
cannot be ascribed to respondent, considering that, while he
asked Castillo not to report the incident to the
management, he also volunteered the information that he
had a piece of scrap wire in his bag and offered to return it
if the same could not possibly be brought outside the
company premises sans a gate pass.
The Court is not unaware of its ruling in Reno Foods, Inc. v.
Nagkakaisang Lakas ng Manggagawa (NLM) –
KATIPUNAN,74 which was cited in the petition,75 where an
employee was dismissed after being caught hiding six (6)
Reno canned goods wrapped in nylon leggings inside her
bag. However, in that case, the main issue was the
payment of separation pay and/or financial assistance and
not the validity of the employee's dismissal. Furthermore,
unlike the present case where respondent tried to take a
piece of scrap wire, the employee in Reno Foods tried to
steal items manufactured and sold by the company. Her
wrongful intent is also evident as she tried to hide the
canned goods by wrapping them in nylon leggings. Here, as
earlier adverted to, respondent volunteered the information
that he had a piece of scrap wire in his bag.
In fine, the dismissal imposed on respondent as penalty for
his attempt to take a piece of scrap wire is unduly harsh
and excessive. The CA therefore did not err in affirming the
NLRC's ruling finding respondent's dismissal to be invalid.
Clearly, the punishment meted against an errant employee
should be commensurate with the offense
committed.76 Thus, care should be exercised by employers
in imposing dismissal to erring employees.77 Based on the
circumstances of this case, respondent's dismissal was not
justified. This notwithstanding, the disposition of the CA
should be modified with respect to the consequential award
of "separation pay in lieu of reinstatement," which was
assailed in the instant petition as one which has "no factual,
legal or even equitable basis."78chanrobleslaw
As a general rule, an illegally dismissed employee is entitled
to: (a) reinstatement (or separation pay, if reinstatement is
not viable); and (b) payment of full
backwages.79chanrobleslaw
In this case, the Court cannot sustain the award of
separation pay in lieu of respondent's reinstatement on the
bare allegation of the existence of "strained relations"
between him and the petitioner. It is settled that the
doctrine on "strained relations" cannot be applied
indiscriminately since every labor dispute almost invariably
results in "strained relations;" otherwise, reinstatement can
never be possible simply because some hostility is
engendered between the parties as a result of their
disagreement.80 It is imperative, therefore, that strained
relations be demonstrated as a fact and adequately
supported by substantial evidence showing that the
relationship between the employer and the employee is
indeed strained as a necessary consequence of the judicial
controversy.81chanrobleslaw
Unfortunately, the Court failed to find the factual basis for
the award of separation pay to herein respondent. The
NLRC Decision did not state the facts which demonstrate
that reinstatement is no longer a feasible option that could
have justified the alternative relief of granting separation
pay.82 Hence, reinstatement cannot be barred, especially, as
in this case, when the employee has not indicated an
aversion to returning to work, or does not occupy a position
of trust and confidence in, or has no say in the operation of
the employer's business.83 As priorly stated, respondent had
expressed remorse over the incident and had asked to be
given the chance to correct his mistake. He had also prayed
for a lower penalty than dismissal, especially considering his
lack of intent to steal, and his unblemished record of 19
years of employment with petitioner. All these clearly
indicate his willingness to continue in the employ of
petitioner and to redeem himself. Considering further that
respondent did not occupy a position of trust and confidence
and that his taking of the scrap wire did not relate to the
performance of his work as packhouse operator, his
reinstatement remains a viable remedy. The award of
separation pay, therefore, being a mere exception to the
rule, finds no application herein. Accordingly, he should be
reinstated to his former position.
Meanwhile, anent the propriety of awarding backwages, the
Court observes that respondent's transgression – even if
not deserving of the ultimate penalty of dismissal –
warrants the denial of the said award following the
parameters in Integrated Microelectronics, Inc. v.
Pionilla.84 In that case, the Court ordered the reinstatement
of the employee without backwages on account of the
following: (a) the fact that the dismissal of the employee
would be too harsh a penalty; and (b) that the employer
was in good faith in terminating the employee, viz. :
The aforesaid exception was recently applied in the case
of Pepsi-Cola Products, Phils., Inc. v. Molon[(704 Phil. 120,
144-145 [2013 ]), wherein the Court, citing several
precedents, held as follows:
An illegally dismissed employee is entitled to either
reinstatement, if viable, or separation pay[,] if
reinstatement is no longer viable, and backwages. In certain
cases, however, the Court has ordered the reinstatement of
the employee without backwages[,] considering the fact
that: (1) the dismissal of the employee would be too harsh
a penalty; and (2) the employer was in good faith in
terminating the employee. For instance, in the case of Cruz
v. Minister of Labor and Employment [(205 Phil. 14, 18-19
[1983 ]), the Court ruled as follows:
The Court is convinced that petitioner's guilt was
substantially established. Nevertheless, we agree with
respondent Minister's order of reinstating petitioner without
backwages instead of dismissal which may be too
drastic. Denial of backwages would sufficiently
penalize her for her infractions. The bank officials acted
in good faith. They should be exempt from the burden of
paying backwages. The good faith of the employer,
when clear under the circumstances, may preclude or
diminish recovery of backwages. Only employees
discriminately dismissed are entitled to backpay.
Likewise, in the case of Ilogon-Suyoc Mines, Inc. v.
[NLRC] [(202 Phil. 850, 856 [1982 ]), the Court pronounced
that "the ends of social and compassionate justice would
therefore be served if private respondent is reinstated but
without backwages in view of petitioner's good faith."
The factual similarity of these cases to Remandaban's
situation deems it appropriate to render the same
disposition.85 (Emphases supplied)
Having established that respondent's dismissal was too
harsh a penalty for attempting to take a piece of scrap wire
that was already for disposal and, hence, practically of no
value, and considering that petitioner was in good faith
when it dismissed respondent for his misconduct, the Court
deems it proper to order the reinstatement of respondent to
his former position but without backwages. Respondent was
not entirely faultless and therefore, should not profit from a
wrongdoing.
WHEREFORE, the petition is PARTLY GRANTED. The
Decision dated February 13, 2015 and the Resolution dated
September 7, 2015 of the Court of Appeals in CA-G.R. SP
No. 136413 are
hereby AFFIRMED with MODIFICATION deleting the
award of separation pay and in lieu thereof, directing the
reinstatement of respondent Renante J. Obra to his former
position without backwages.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 157633 September 10, 2014
NORTHWEST AIRLINES, INC., Petitioner,
vs.
MA. CONCEPCION M. DEL ROSARIO, Respondent.
DECISION
BERSAMIN, J.:
Under review is the decision promulgated on June 21,
2002,1 whereby the Court of Appeals (CA) dismissed the petition
for certiorari filed by Northwest Airlines, Inc. to assail on the
ground of grave abuse of discretion amounting to lack or excess
of jurisdiction the adverse decision of the National Labor
Relations Commission (NLRC).
Antecedents
Petitioner Northwest Airlines, Inc. employed respondent Ma.
Concepcion M. Del Rosario on December 10, 1994 as one of its
Manilabased flight attendants. On May 18, 1998, Del Rosario was
assigned at the Business Class Section of Northwest Flight NW
26 bound for Japan. During the boarding preparations, Kathleen
Gamboa, another flight attendant assigned at the First Class
Section of Flight NW 26, needed to borrow a wine bottle opener
from her fellow attendants because her wine bottle opener was
dull. Vivien Francisco, Gamboa’s runner, went to the Business
Class Section to borrow a wine bottle opener from Del Rosario,
but the latter remarked that any flight attendant who could not
bring a wine bottle opener had no business working in the First
Class Section. Upon hearing this, Aliza Ann Escaño, another
flight attendant, offered her wine bottle opener to Francisco.
Apparently, Gamboa overheard Del Rosario’s remarks, and later
on verbally confronted her. Their confrontation escalated into a
heated argument. Escaño intervened but the two ignored her,
prompting her to rush outside the aircraft to get Maria Rosario D.
Morales, the Assistant Base Manager, to pacify them.
The parties differed on what happened thereafter. Del Rosario
claimed that only an animated discussion had transpired between
her and Gamboa, but Morales insisted that it was more than an
animated discussion, recalling that Del Rosario had even
challenged Gamboa to a brawl (sabunutan). Morales asserted
that she had tried topacify Del Rosario and Gamboa, but the two
did not stop; that because the two were still arguing although the
Business Class passengers were already boarding, she ordered
them out of the plane and transfer to another nearby Northwest
aircraft; that she inquired from them about what had happened,
and even asked if they were willing to fly on the condition that
they would have to stay away from each other during the entire
flight; that because Del Rosario was not willing to commit herself
to do so, she decided not to allow both of them on Flight NW 26,
and furnished them a Notice of Removal from Service (effectively
informing Del Rosario of her dismissal from the service pending
an investigation of the fighting incident between her and
Gamboa).
On May 19, 1998, Morales sent a letter to Del Rosario telling her
that Northwest would conduct an investigation of the incident
involving her and Gamboa. The investigation was held on May
28, 1998 before Atty. Ceazar Veneracion III, Northwest’s Legal
Counsel and Head of its Human Resources Department. All the
parties attended the investigation
On June 19, 1998, Del Rosario was informed of her termination
from the service. Northwest stated that based on the results of
the investigation, Del Rosario and Gamboa had engaged in a
fight on board the aircraft, even if there had been no actual
physical contact between them; and that because fighting was
strictly prohibited by Northwest to the point that fighting could
entail dismissal from the service even if committed for the first
time, Northwest considered her dismissal from the service
justified and in accordance with the Rules of Conduct for
Employees, as follows:
Section 1, General
x x x. Rule infractions will be dealt with according to the
seriousness of the offense and violators will be subjected to
appropriate disciplinary action up to and including discharge.
Some acts of misconduct, even if committed for the first time, are
so serious that, standing alone, they justify immediate discharge.
Some examples of these offenses are violations of rules
regarding theft,alcohol and drugs, insubordination, dishonesty,
fighting, falsification of records, sleeping on the job, failure to
cooperate or lying in a Company investigation, intentional
destruction or abuse of property, threatening, intimidating or
interfering with other employees, abuse of nonrevenue and
reduced rate travel privileges and unauthorized use of Company
communications systems. x x x x
Section 24 (c), Disturbing Others, which states that:
Harassing, threatening, intimidating, assaulting, fighting or
provoking a fight or similar interference with other employees at
any time, on or off duty is prohibited." (Italics supplied)
Del Rosario subsequently filed her complaint for illegal dismissal
against Northwest.2
Decision of the Labor Arbiter
In her decision dated January 18, 1999,3 Labor Arbiter Teresita D.
Castillon-Lora ruled in favor of Northwest, holding that the
dismissal of Del Rosario had been justified and valid upon taking
into account that Northwest had been engaged in the airline
business in which a good public image had been demanded, and
in which flightattendants had been expected to maintain an image
of sweetness and amiability; that fighting among its employees
even in the form of heated arguments or discussions were very
contradictory to that expected image;4 and that it could validly
dismiss its employees like the respondent because it had been
entitled to protect its business interests by putting up an
impeccable imageto the public.
Ruling of the NLRC
Upon appeal, the NLRC reversed the decision of the Labor
Arbiter, and ruled in favor of Del Rosario, declaring that the
incident between her and Gamboa could not be considered as
synonymous with fighting as the activity prohibited by Northwest’s
Rules of Conduct; that based on Black’s Law Dictionary,
fightreferred to a hostile encounter, affray, or altercation; a
physical or verbal struggle for victory, pugilistic combat; that
according to Bouvier’s Law Dictionary, fighting did not necessarily
imply that both parties should exchange blows, for it was
sufficient that they voluntarily put their bodies in position with that
intent;5 and that the incident between Del Rosario and Gamboa
could notbe held similar to the fightthat Northwest penalized
under its Rules of Conduct.
The NLRC further ratiocinated as follows:
Evident in the definition of fighting is the existence of an
underlying hostility between the parties which is sointense that
there is an imminent danger of a physical conflict (if there is none
yet). In other words, when we say two people are fighting, at the
very least, they should project a general appearance of wanting
to physically strike each other. Was this the image that appellant
and FA Gamboaprojected when they were facing each other
during the incident of May 18, 1998[?] We do not think so.
x x x Almost unanimously, the witnesses of NWA refer to the
incident as "arguing" or a "serious or animated discussion." An
argument is an effort to establish belief bya course of reasoning
(Bouvier's Law Dictionary). In ordinary parlance, arguing is
merely talking or debating about a certain issue. There are
nounderpinnings of animosity in the discussion nor (sic) between
the parties. These witnesses never saw any hostility between the
appellant and FA Gamboa. Neither did they see these two ladies
wanting to strike each other. What they saw were two FAs
engaged in an animated verbal exchange, arguing but not
fighting.6
The NLRC ordered the reinstatement of Del Rosario to her former
position without loss of seniority rights and with payment of
backwages, per diems, other lost income and benefitsfrom June
19, 1998; as well as the payment of attorney’s fees equivalent to
10% of the monetary award.
Decision of the CA
Aggrieved, Northwest elevated the adverse decision of the NLRC
to the CA on certiorari, averring that the NLRC thereby committed
grave abuse of discretion in reversing the decision of the Labor
Arbiter, and submitting that Del Rosario’s dismissal from the
service had been for a just cause, with the evidence presented
against her being more than sufficient to substantiate its position
that there had really been a fight between her and Gamboa; and
that the NLRC likewise gravely abused its discretion in ordering
the reinstatement of Del Rosario and the payment of her
backwages and attorney’s fees.
As stated, the CA sustained the NLRC through its decision
promulgated on June 21, 2002, observing that Northwest did not
discharge its burden to prove not merely reversible error but
grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the NLRC; and that, indeed, the NLRC
had correctly held that Del Rosario’s conduct did not constitute
serious misconduct, because the NLRC, in determining the usual,
ordinary and commonly understood meaning of the word fighting,
had resorted to authoritative lexicons that supported its
conclusion that the exchange of words between Del Rosario and
Gamboadid not come within the definition of the word fighting.7
The CA disposed thusly:
WHEREFORE, for lack of merit, the instant petition is
DISMISSED. Accordingly, the decision ofthe NLRC dated
January 11, 2000, is hereby AFFIRMEDwith the
MODIFICATIONthat in lieu of reinstatement, petitioner is ordered
to pay private respondent separation pay equivalent to one
month's salary for every year of service plus full backwages
without deduction or qualification, counted from the date of
dismissal until finality of this decision including other benefits to
which she is entitled under the law. Petitioner is likewise ordered
to pay respondent Del Rosario attorney’s feesconsisting of
five(5%) per cent of the adjudged relief.
SO ORDERED.8
Issues
The issues are the following, namely: (1) Was Del Rosario’s
dismissal from the service valid?; and (2) Were the monetary
awards appropriate?
Ruling
The Court AFFIRMSthe decision of the CA.
As provided in Article 282 of the Labor Code, an employer may
terminate an employee for a just cause, to wit:
Art. 282. TERMINATION BY EMPLOYER
An employer may terminate an employee for any of the following
causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his
duties;
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
Northwest argues that Del Rosario was dismissed on the grounds
of serious misconduct and willful disobedience. Misconduct refers
to the improper or wrong conduct that transgresses some
established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent
and not mere error in judgment. But misconduct or improper
behavior, to be a just cause for termination of employment, must:
(a) be serious; (b) relate to the performance ofthe employee’s
duties; and (c) show that the employee has become unfit to
continue working for the employer.9
There is no doubt that the last two elements of misconduct were
present in the case of Del Rosario. The cause of her dismissal
related to the performance of her duties as a flightattendant, and
she became unfit to continue working for Northwest. Remaining
to be determined is, therefore, whether the misconduct was
serious as tomerit Del Rosario’s dismissal. In that respect, the
fightbetween her and Gamboa should beso seriousthat it entailed
the termination of her employment even if it was her first offense.
Northwest insists that what transpired on May 18, 1998 between
her and Gamboa was obviously a form of fightthat it strictly
prohibited, but Del Rosario disputes this by contending thatit was
only an animated discussion between her and Gamboa. She
argues that as settled in American jurisprudence fightpertained to
combat or battle, like the hostile encounter or engagement
between opposing forces, suggesting primarily the notion of a
brawl or unpremeditated encounter, or of a pugilistic
combat;10while argumentwas a connected discourse based upon
reason, or a course of reasoning tending and intended to
establish a position and to induce belief.11
In several rulings where the meaning of fightwas decisive, the
Court has observed that the term fightwas considered to be
different from the term argument. In People v. Asto,12 for instance,
the Court characterized fightas not just a merely verbal tussle but
a physical combat between two opposing parties, to wit:
Well into their second bottle of gin, at about eleven o'clock that
morning, Fernando Aquino and Peregrino had a verbal
tussle. Fernando Aquino declared that he was going to run for
1âwphi 1
councilor of Alcala, Pangasinan. Peregrino countered by saying:
"If you will run for that post, cousin, I will fight you." After a brief
exchange of words, Fernando Aquino, laughing, went to sit
beside Abagat. As Aquino continued with his mirth, Abagat stared
at Peregrino with contempt.
xxx. A few minutes later, he heard a commotion in the plantation
some two hundred meters away. He claims to have seen several
1âw phi 1
people fightingeach other with pieces of wood butdid not go to the
field to check what was happening.13 (Italics supplied.)
Similarly, in Pilares, Sr. v. People,14 fightwas held to be more than
just an exchange of words that usually succeeded the
provocation by either party, thus:
When the petitioner was about to hand over the bottles of beer to that the respondent judge, tribunal or board evaded a positive
the private complainant, the latter called him "coward" and dared duty, or virtually refused to perform the duty enjoined or to act in
him to get out for a fight. Insulted, the petitioner went out of his contemplation of law, such as when such judge, tribunal or board
store and chased the private complainant. (Italics supplied.) exercising judicial or quasi-judicial powers acted in a capricious or
whimsical manner as to be equivalent to lack of jurisdiction." Alas,
Based on the foregoing, the incident involving Del Rosario and Northwest did not show how the NLRC could have abused its
Gamboa could not be justly considered as akin to the discretion, let alone gravely, in ruling adversely against it.
fightcontemplated by Northwest. In the eyes of the NLRC, Del
Rosario and Gamboa were arguing but not fighting. The WHEREFORE, the Court AFFIRMS the decision of the Court of
understanding of fight as one that required physical combat was Appeals promulgated on June 21, 2002; and ORDERS the
absent during the incident of May 18, 1998. Moreover, the claim petitioner to pay the costs of suit.
of Morales that Del Rosario challenged Gamboa to a brawl
(sabunutan) could not be given credence by virtue of its being SO ORDERED.
self-serving in favor of Northwest, and of its being an apparent
afterthought on the part of Morales during the investigation of the
incident, without Del Rosario having the opportunity to contest
Morales' statement. In that context, the investigation then served
only as Northwest's means to establish that the grounds of a valid
dismissal based on serious misconduct really existed.

Moreover, even assuming arguendo that the incident was the

kind of fight prohibited by Northwest's Rules of Conduct, the
same could not be considered as of such seriousness as to
warrant Del Rosario's dismissal from the service. The gravity of
the fight, which was not more than a verbal argument between
them, was not enough to tarnish or diminish Northwest's public
image.

Under the circumstances, therefore, the CA properly ruled that

the NLRC did not gravely abuse its discretion amounting to lack
or excess of jurisdiction by declaring Del Rosario's dismissal
unjustified. Northwest as the petitioner for certiorari must
demonstrate grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the NLRC. Grave abuse of
discretion, according to De las Santos v. Metropolitan Bank and
Trust Company,15"must be grave, which means either that the
judicial or quasi-judicial power was exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, or
 THIRD DIVISION
G.R. No. 215047, November 23, 2016
UNIVERSAL CANNING INC., MS. MA. LOURDES A.
LOSARIA, PERSONNEL OFFICER, AND ENGR. ROGELIO
A. DESOSA, PLANT MANAGER, Petitioners, v. COURT OF
APPEALS AND DANTE SAROSAL, FRANCISCO
DUMAGAL, JR., NELSON E. FRANCISCO, ELMER C.
SAROMINES AND SAMUEL D. CORONEL, Respondents.
DECISION
PEREZ, J.:
For resolution by the Court is this instant Petition for Review
on Certiorari1 filed by petitioners Universal Canning Inc.,
Ma. Lourdes Losaria and Engr. Rogelio A. Desosa, seeking to
reverse and set aside the Decision2 dated 13 December
2013 and the Resolution3 dated 9 September 2014 of the
Court of Appeals in CA-G.R. SP. No. 03808-MIN. The
assailed decision and resolution reversed the ruling of the
National Labor Relations Commission (NLRC) in NLRC Case
No. MAC-09-011031-2009 and declared the dismissal of
respondents Dante M. Sarosal, Francisco Dumagal. Jr.,
Nelson E. Francisco, Elmer C. Saromines and Samuel D.
Coronel, as illegal.chanroblesvirtuallawlibrary
The Facts
Petitioner Universal Canning Inc. is a domestic corporation
duly authorized to engage in business by Philippine laws.
Petitioners Ma. Lourdes A. Losaria and Engr. Rogelio Desosa
are respectively employed by the company as its Personnel
Officer and Plant Manager.4
Respondents Dante M. Sarosal, Francisco Dumagal. Jr.,
Nelson E. Francisco, Elmer C. Saromines and Samuel D.
Coronel were employed by petitioner Universal Canning on
various capacities with wages ranging from P240.00 to
P280.00 a day.5
On 21 January 2009, respondents were caught by petitioner
company's Purchasing Officer, Falconieri Almazan, playing
cards at the company's premises during working hours. The
incident was immediately reported by Almazan to the
Personnel Officer, Ma. Lourdes Losaria, who immediately
conducted an investigation to determine the names and of
those who were involved in the gambling activities. On the
same day, respondents were placed under preventive
investigation pending further investigation by a panel
indicated in a memorandum addressed to and duly received
by the individuals concerned. Under the same
memorandum, respondents were required by the petitioner
to file their written explanation of the incident. Respondents
complied with the directive.6
In their letter-explanation dated 23 January 2009,
respondents denied that they were involved in gambling
activities within the company's premises during work hours.
It was argued by the respondents that while indeed they
were playing cards inside the company premises, it cannot
be considered gambling as there was no money involved
and that it took place during noon break.7
On 9 February 2009, the investigation was conducted where
respondents were questioned regarding their participation in
the 21 January 2009 activities inside the company's
premises. After the inquiry, the Investigating Officer found
that respondents were playing cards during working hours
which is considered an infraction of the company's rules and
regulations.8
On the basis of the Investigation Report, respondents were
dismissed from employment through a notice thereof dated
19 February 2016 which enumerated the grounds: (1)
taking part in a betting, gambling or any unauthorized game
of chance inside the company premises while on duty; and
(2) for loss of trust and confidence. The termination of
respondents was reported by the petitioner to the
Department of Labor of Employment (DOLE) on 24 February
2009.
Aggrieved by the tum of events, respondents initiated an
action for illegal dismissal, illegal suspension, payment of
separation pay, rest day pay and moral and exemplary
damages before the Labor Arbiter. In their Position Paper,
respondents argued that their severance from employment
is unlawful because of lack of sufficient basis for their
termination. They reiterated their position in their letter-
explanation that they could not be considered guilty of
gambling because there were no stakes involved and the
activity took place during authorized noon break.
For lack of merit, the Labor Arbiter dismissed the complaint
in a Decision9 dated 24 August 2009. The Labor Arbiter held
that respondents were dismissed for just cause and after
compliance with due process. The dispositive portion of the
Decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, the above-entitled case is hereby dismissed
for lack of merit.
SO ORDERED.10
On appeal, the NLRC affirmed the dismissal of respondents'
complaint. It was declared by the Commission that "playing
cards during office hours whether for a stake or fun is
considered a dishonest act of stealing company time. The
company's working hours could be used for more profitable
activities since they are paid by the company." Setting aside
the claim of respondents that their length of service should
be considered a mitigating circumstance, the NLRC held that
"the fact that [respondents] have been employed by the
company for a long period of time could not work in their
favor. Their attitude towards their work is smocked (sic)
with disloyalty, lack of concern and enthusiasm."11
On Certiorari, the Court of Appeals reversed and set aside
the NLRC Decision on the ground that it was rendered with
grave abuse of discretion amounting to lack or excess in
jurisdiction. According to the appellate court, there exists no
just cause to dismiss respondents from employment. As
rank and file employees, respondents could not be
dismissed for lack of trust and confidence as they were not
holding positions imbued with trust and confidence. 12 The
Court of Appeals disposed in this
wise:chanRoblesvirtualLawlibrary
THE FOREGOING CONSIDERED, the instant PETITION is
thus GRANTED. The NLRC's Resolution dated December 29,
2009 and June 29, 2010 are hereby REVERSED AND SET
ASIDE, and a new entered mandating UCI to:
1. Pay each [respondents] their respective full
backwages, inclusive of allowances and other
benefits required by law or their monetary
equivalent computed from the time they were
actually dismissed effective February 20,
2009 until the finality of this decision; and
2. To reinstate [respondents] without loss of
seniority rights and other privileges, or if
reinstatement is not possible, to pay each of
the petitioners their respective separation pay
equivalent to one month to every year of
service, computed from the date of
employment up to the finality of the decision.
A fraction of at least six (6) months shall be
considered one (1) whole year. Any fraction
below six (6) months shall be paid pro rata.
SO ORDERED.
In a Resolution13 dated 9 September 2014, the Court of
Appeals refused to reconsider its earlier Decision.
Petitioners are now before this Court via this instant Petition
for Review on Certiorari assailing the Courts of Appeals'
Decision and Resolution on the ground
that:chanRoblesvirtualLawlibrary
The Issue
THE COURT OF APPEALS ERRED IN REVERSING AND
SETTING ASIDE THE NLRC DECISION WHICH IN TURN,
AFFIRMED THE LABOR ARBITER'S DECISION DISMISSING
RESPONDENTS' COMPLAINT FOR ILLEGAL DISMISSAL FOR
LACK OF MERIT.
The Court's Ruling
The core issue here is whether the Court of Appeals erred in
holding that there is no just cause for dismissing
respondents from employment.
The Court resolves to grant the petition.
It must be stressed at the onset that respondents were
dismissed by petitioners for two reasons: (1) for violation of
company rules and regulations under Paragraph IV, Number
4 under Offenses Against Public Morals;14 and (2) for loss of
trust and confidence. While it is true that loss of trust and
confidence alone could not stand as a ground for dismissal
in this case since respondents are rank and file employees
who are not occupying positions of trust and confidence,
such is not the only ground, relied by the company in
terminating respondents' employment. Petitioner company
also cited the infraction of company rules and regulations, in
addition to loss and trust of confidence. Infraction of the
company rules and regulation which is akin to serious
misconduct is a just cause for termination of employment
recognized under Article 282 (a) of the Labor Code which
states that:chanRoblesvirtualLawlibrary
ARTICLE 282. Termination by employer. An employer may
terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
Misconduct is defined as an improper or wrong conduct. It is
a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in
judgment. To constitute a valid cause for the dismissal
within the text and meaning of Article 282 of the Labor
Code, the employee's misconduct must be serious, i.e., of
such grave and aggravated character and not merely trivial
or unimportant. Additionally, the misconduct must be
related to the performance of the employee's duties
showing him to be unfit to continue working for the
employer. Further, and equally important and required, the
act or conduct must have been performed with wrongful
intent.15
Here, there is no question that respondents were caught in
the act of engaging in gambling activities inside the
workplace during work hours, a fact duly established during
the investigation conducted by the petitioner company and
adopted by the labor tribunals below. As a matter of fact,
respondents never controverted their participation in the
gambling activities, but instead raised the defense that it
took place during noon break and that no stakes were
involved; these claims even if were proven true, will
however not save the day for the respondents. The use of
the company's time and premises for gambling activities is a
grave offense which warrants the penalty of dismissal for it
amounts to theft of the company's time and it is explicitly
prohibited by the company rules on the ground that it is
against public morals.
Suffice it to state that an employee may be validly substantial evidence.19
dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the company's WHEREFORE, premises considered, the petition
business. It is the recognized prerogative of the employer to is GRANTED. The assailed Resolutions of the Court of
transfer and reassign employees according to the Appeals are hereby REVERSED AND SET ASIDE.
requirements of its business. For indeed, regulation of
manpower by the company clearly falls within the ambit of SO ORDERED.
management prerogative. A valid exercise of management
prerogative is one which, among others, covers: work
assignment, working methods, time, supervision of workers,
transfer of employees, work supervision, and the discipline,
dismissal and recall of workers. Except as provided for, or
limited by special laws, an employer is free to regulate,
according to his own discretion and judgment, all aspects of
employment.16 As a general proposition, an employer has
free reign over every aspect of its business, including the
dismissal of his employees as long as the exercise of its
management prerogative is done reasonably, in good faith,
and in a manner not otherwise intended to defeat or
circumvent the rights of workers.17

Both the Labor Arbiter and the NLRC uniformly ruled that
the complaint for illegal dismissal filed by the respondents
utterly lacks merit and, thus, upheld the petitioners'
position that there exists a valid ground for dismissing the
respondents. The NLRC even went further by saying that
respondents' length of service should not mitigate the
consequence of their acts as they owe the company loyalty
and concern. Considering that there is substantial evidence
at hand to support the ruling of the labor tribunals, the
Court hereby adopts their findings.

It is settled that this Court is not a trier of facts, and this

applies with greater force in labor cases.18Factual findings of
administrative or quasi-judicial bodies, including labor
tribunals, are accorded much respect by this Court as they
are specialized to rule on matters falling within their
jurisdiction especially when these are supported by
 SECOND DIVISION
[G.R. No. 117418. January 24, 1996]
STELLAR INDUSTRIAL SERVICES, INC., petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and
ROBERTO H. PEPITO, respondents.
DECISION
REGALADO, J.:
Imputing grave abuse of discretion by public respondent as its
cause of concern in this special civil action for certiorari, petitioner
Stellar Industrial Services, Inc. (Stellar) seeks the annulment of the
decision,1 dated May 31, 1994, of the National Labor Relations
Commission in NLRC NCR CA No. 004326-93 and its resolution of
July 21, 1994 denying petitioners motion for
reconsideration. Interestingly, this recourse is the culmination of
petitioners sustained corporate and legal efforts directed against a
mere janitor who was formerly employed by it.
Stellar Industrial Services, Inc., an independent contractor
engaged in the business of providing manpower services, employed
private respondent Roberto H. Pepito as a janitor on January 27,
1975 and assigned the latter to work as such at the Maintenance Base
Complex of the Philippine Airlines (MBC-PAL) in Pasay City. There,
Pepito toiled for a decade and a half. According to petitioner, private
respondents years of service at MBC-PAL were marred by various
infractions of company rules ranging from tardiness to gambling, but
he was nevertheless retained as a janitor out of humanitarian
consideration and to afford him an opportunity to reform.2
Stellar finally terminated private respondents services
on January 22, 1991 because of what it termed as Pepitos being
Absent Without Official Leave (AWOL)/Virtual Abandonment of Work
-Absent from November 2 - December 10, 1990. Private respondent
had insisted in a letter to petitioner dated December 2, 1990, to which
was attached what purported to be a medical certificate, that during
the period in question he was unable to report for work due to severe
stomach pain and that, as he could hardly walk by reason thereof, he
failed to file the corresponding official leave of absence.3
As petitioner disbelieved private respondents explanation
regarding his absences, the latter contested his severance from
employment before the Arbitration Branch of the National Labor
Relations Commission (NLRC) in Manila in a complaint docketed as
NLRC NCR-00-03-01869-91 for illegal dismissal, illegal deduction and
underpayment of wages under Wage Order NCR-001, with prayer for
moral and exemplary damages and attorneys fees. While the labor
arbiter was of the view that Pepito was not entitled to differential pay
under said wage Order, or to moral and exemplary damages for lack
of bad faith on the part of petitioner, he opined that private respondent
had duly proved that his 39-day absence was justified on account of
illness and that he was illegally dismissed without just cause. 4
Thus the decision rendered on December 28, 1992 by Labor
Arbiter Manuel R. Caday decreed:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent to immediately reinstate
complainant to his former position as Utilityman, without loss of seniority
rights and with full backwages and other rights and privileges appurtenant
to his position until he is actually reinstated. As computed, the judgment
award in favor of the complainant is stated hereunder:
Backwages
1/27/91 - 12/27/92
at P118. 00 per day P82,550.83
Refund of amount
illegally deducted
(3 years) 288.00
Grand Total P82,838.83
 The respondent is further ordered to pay the complainant
reasonable attorneys fees equivalent to 10% of the amount
recoverable by the complainant.5
As hereinbefore stated, said judgment of the labor arbiter was
affirmed by respondent commission. Petitioners subsequent motion
for reconsideration was likewise rebuffed by the NLRC, hence the
present remedial resort to this Court.
Petitioner contends that public respondent acted with grave
abuse of discretion when it discussed and resolved the issue of
abandonment which petitioner had not, at any time, raised before it for
resolution. Further, petitioner considers it patently erroneous for public
respondent to rule that the medical certificate adduced by Pepito
sufficiently established the fact of sickness on his part which thereby
justified his absences. Additionally, it claims that respondent
commission gravely erred when it did not carefully examine the
evidence, pointing out Pepitos errant behavior and conduct.6
Petitioner argues, moreover, that the award of back wages and
attorneys fees was not justified considering that Pepito was validly
dismissed due to serious misconduct on his part. Lastly, petitioner
insists that the deductions it imposed upon and collected from Pepitos
salary was authorized by a board resolution of Stellar Employees
Association, of which private respondent was a member. 7 The Court,
however, is unable to perceive or deduce facts constitutive of grave
abuse of discretion in public respondents disposition of the
controversy which would suffice to overturn its affirmance of the labor
arbiters decision.
On the initial issue posed by petitioner, respondent commission
should indeed have refrained from passing upon the matter of
abandonment, much less from considering the same as the ground for
petitioners termination of private respondents services. The records of
the case indicate that Pepito s employment was cut short by Stellar
due to his having violated a company rule which requires the filing of
an official leave of absence should an employee be unable to report
for work, aside from the circumstance that Stellar did not find credible
Pepitos explanation that he was then suffering from severe stomach
and abdominal pains.
To be sure, public respondent may well have been misled by the
fact that petitioner, in dismissing Pepito, labelled his violation as
Absent Without Official Leave (AWOL)/Virtual
Abandonment.8 Respondent NLRC should have noted that the matter
of abandonment was never brought up as an issue before it and that
Stellar never considered Pepito as having abandoned his job. As a
matter of fact, private respondent was only considered by petitioner as
absent until December 10, 1990.9 Pepito was dismissed from work
simply for going on leave without prior official approval and for failing
to justify his absence. This is evident from the fact that petitioner did
not assail Pepitos allegations that, at the start of his extended
absence, he had informed Stellar, through telephone calls to his
superior at MBC-PAL, that he could not report for work due to illness.
Thus, while abandonment is indisputably a valid legal ground for
terminating ones employment,10 it was a non-issue in this dispute. Be
that as it may, that misapprehension of the NLRC on this particular
issue is not to be considered an abuse of discretion of such gravity as
to constitute reversible error.
In the main, therefore, what is truly at issue here is whether or not
serious misconduct for non-observance of company rules and
regulations may be attributed to Pepito and, if so, whether or not the
extreme penalty of dismissal meted to him by Stellar may be justified
under the circumstances. We resolve both issues in the negative.
Stellars company rules and regulations on the matter could not
be any clearer, to wit:
Absence Without Leave
Any employee who fails to report for work without any prior approval from
his superior(s) shall be considered absent without leave.
In the case of an illness or emergency for an absence of not more than one
(1) day, a telephone call or written note to the head office, during working
hours, on the day of his absence, shall be sufficient to avoid being
penalized.
In the case of an illness or an emergency for an absence of two (2) days or
more, a telephone call to the head office, during regular working hours, on
the first day of his absence, or a written note to the head office, (ex.
telegram) within the first three (3) days of his absence, and the submission
of the proper documents (ex. medical certificate) on the first day he reports
after his absence shall be sufficient to avoid being penalized.
1st offense - three (3) days suspension
2nd offense - seven (7) days suspension
3rd offense - fifteen (15) days suspension
4th offense - dismissal (with a period of one (1) year.11
There was substantial compliance with said company rule by
private respondent. He immediately informed his supervisor at MBC-
PAL of the fact that he could not report for work by reason of illness.
At the hearing, it was also established without contradiction that Pepito
was able to talk by telephone to one Tirso Pamplona, foreman at MBC-
PAL, and he informed the latter that he would be out for two weeks as
he was not feeling well.12 Added to this is his letter to the chief of
personnel which states that, on November 2, 1990, he relayed to his
supervisor at MBC-PAL his reason for not reporting for work and that,
thereafter, he made follow-up calls to their office when he still could
not render services.13 As earlier noted, these facts were never
questioned nor rebutted by petitioner.
While there is no record to show that approval was obtained by
Pepito with regard to his absences, the fact remains that he complied
with the company rule that in case of illness necessitating absence of
two days or more, the office should be informed beforehand about the
same, that is, on the first day of absence. Since the cause of his
absence could not have been anticipated, to require prior approval
would be unreasonable. On this score, then, no serious misconduct
may be imputed to Pepito. Necessarily, his dismissal from work,
tainted as it is by lack of just cause, was clearly illegal.
More importantly, private respondent duly presented the requisite
medical certificate. True, Stellar did not accept the veracity of the
same, but it did so quite erroneously. Carlos P. Callanga, petitioners
vice-president for operations, interpreted the certificate submitted by
Pepito in the following strained and nitpicking manner:
a) The medical certificate merely states that Pepito suffered from alleged
abdominal pain from November 2, 1990 to December 14, 1990. It does not
state that the abdominal pain was so severe as to incapacitate him for (sic)
work.
b) Because the medical certificate states that the abdominal pain was merely
alleged, I had reason to believe that the doctor who issued it did not
personally know if such abdominal pain really existed for the period in
question.
c) From the medical certificate, I gathered that the doctor who signed it
examined Pepito only on December 14, 1990, which is the date it appears to
have been issued. It does not state that said doctor actually treated Pepito
for the period of his absence.
d) The medical certificate also says Pepito was suffering from alleged
abdominal pains until December 14, 1990, but that he could resume work
anytime thereafter. This implies that he was physically fit to resume work
anytime thereafter. However, our records show that Pepito was absent only
until December 10, 1990. If it is true that Pepitos abdominal pains
incapacitated him for (sic) work, he should have been absent
until December 14, 1990. These give me reason to believe that the medical
certificate was secured only as an afterthought and does not satisfactorily
explain Pepito s protracted absence.14
A careful perusal and objective appreciation of the medical
certificate in question, which was properly signed by a physician
whose existence and professional license number was not questioned
by petitioner, convince us to conclude otherwise. Handwritten by the
issuing doctor, it states in no uncertain terms:
This is to inform that I had examined Roberto Pepito. He has already
recovered from his intestinal abdominal pains suffered last Nov. 2/90 to
Dec. 14/90.
He may resume his work anytime.15
 Thus, nowhere in said certificate is there any indication that the
abdominal pain suffered by Pepito was only as alleged by him. It
definitely states that Pepito was personally examined by the physician
and it can be clearly deduced from the affirmative statements (h)e has
already recovered x x x and (h)e may resume his work anytime that
Pepito was really not in a position to report for work from November 2
to December 14, 1990 on account of actual, and not merely alleged,
intestinal abdominal pains. The certificate further confirms Pepitos
earlier information given by him on November 2, 1990 and which he
duly relayed to his supervisor as the true reason for his inability to
work. Callanga obviously misread, we hope unwittingly, intestinal
abdominal pain as alleged abdominal pain.
Again, there is no logic in Callangas assumption that the
certificate was obtained only as an afterthought. It should be noted
that Callanga required Pepito to make a written explanation regarding
his absences only on December 18, 1990.16 Pepito accordingly
complied with the same and he attached therewith the medical
certificate which showed its date of issuance as December 14,
1990.17 Thus, even before he was made to explain his absences, he
already had the medical certificate to prove the reason therefor. To
characterize the procurement of the certificate as an afterthought is
consequently baseless, especially considering that it bears all the
earmarks of regularity in its issuance. Labor is entitled to at least
elementary fairness from management.
Petitioners reliance on Pepitos past infractions as sufficient
grounds for his eventual dismissal, in addition to his prolonged
absences, is likewise unavailing. The correct rule is that previous
infractions may be used as justification for an employees dismissal
from work in connection with a subsequent similar offense.18 That is
not the case here. Stellar contends that Pepitos service record shows
that he was under preventive suspension in October, 1979 due to
gambling and that, at various days of certain months in 1986, 1987,
and 1988, he was issued several warnings for habitual tardiness.
Then, in October, 1988, he was asked to explain why he was carrying
three sacks of rice in violation of company rules.
In the present case, private respondents absences, as already
discussed, were incurred with due notice and compliance with
company rules and he had not thereby committed a similar offense as
those he had committed in the past. Furthermore, as correctly
observed by the labor arbiter, those past infractions had either been
satisfactorily explained, not proven, sufficiently penalized or condoned
by the respondent. In fact, the termination notice furnished Pepito only
indicated that he was being dismissed due to his absences
from November 2, 1990 to December 10, 1990 supposedly without
any acceptable excuse therefor. There was no allusion therein that his
dismissal was due to his supposed unexplained absences on top of
his past infractions of company rules. To refer to those earlier
violations as added grounds for dismissing him is doubly unfair to
private respondent. Significantly enough, no document or any other
piece of evidence was adduced by petitioner showing previous
absences of Pepito, whether with or without official leave.
Regarding the amount deducted from Pepitos salary, Stellar
stresses that said deduction concerning death aid benefits is lawful
since these were made in accordance with Board Resolution No. 02-
85 adopted on August 17, 1988 by the board of directors of the Stellar
Employees Association. However, Article 24 1(n) of the Labor Code
and the implementing rules thereon in Section 13(a), Rule VIII, Book
III disallow such deductions. Article 241(n) states that (n)o special
assessment or other extraordinary fees may be levied upon the
members of a labor organization unless authorized by a written
resolution of a majority of all the members of a general membership
meeting duly called for the purpose. x x x.
The deduction could be characterized as a special assessment
for a Death Aid Program. Consequently, a mere board resolution of
the directors, and not by the majority of all the members, cannot validly
allow such deduction. Also, a written individual authorization duly
signed by the employee concerned is a condition sine qua
non therefor. Employees are protected. by law from unwarranted
practices that have for their object the diminution of the hard-earned
compensation due them.19 Private respondent herein must be
extended that protection, especially in view of his lowly employment
status.
IN VIEW OF THE FOREGOING, no grave abuse of discretion
having been committed by respondent National Labor Relations
Commission in its decision and resolution assailed in the case at bar,
the instant petition of Stellar Industrial Services, Inc. is
hereby DISMISSED for lack of merit.
SO ORDERED.
 THIRD DIVISION
G.R. No. 211497, March 18, 2015
HOCHENG PHILIPPINES
CORPORATION, Petitioner, v. ANTONIO M.
FARRALES, Respondent.
DECISION
REYES, J.:
Before this Court on Petition for Review on Certiorari1 is the
Decision2 dated October 17, 2013 of the Court of Appeals
(CA) in CA-G.R. SP No. 125103, which reversed the
Decision3 dated February 29, 2012 and Resolution4 dated
May 7, 2012 of the National Labor Relations Commission
(NLRC) in NLRC LAC No. 08-002249-11, and reinstated with
modifications the Decision5 dated April 29, 2011 of the
Labor Arbiter (LA) in NLRC Case No. RAB-IV-03-00618-10-
C, which found that respondent Antonio M. Farrales
(Farrales) was illegally dismissed by Hocheng Philippines
Corporation (HPC). The fallo of the appellate decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Decision of the
Labor Arbiter dated April 29, 2011 in NLRC Case No. RAB-
IV-03-00618-10-C is reinstated with modifications.
Private respondent Hocheng Philippines Corporation is liable
to pay [Farrales] the following:chanRoblesvirtualLawlibrary
(1)Full backwages from date of dismissal on February 15,
2010 until date of decision equivalent to P276,466.67;
(2)Separation pay of one (1) month salary per year of
service for a period of twelve years equivalent to
P228,800.00;
(3)Appraisal year-end bonus in the sum of P11,000.00; and,
(4)Attorney’s fees equivalent to 10% of the total award.
SO ORDERED.6
The Facts
Farrales was first employed by HPC on May 12, 1998 as
Production Operator, followed by promotions as (1)
Leadman in 2004, (2) Acting Assistant Unit Chief in 2007,
and (3) Assistant Unit Chief of Production in 2008, a
supervisory position with a monthly salary of ?17,600.00.
He was a consistent recipient of citations for outstanding
performance, as well as appraisal and year-end
bonuses.7chanroblesvirtuallawlibrary
On December 2, 2009, a report reached HPC management
that a motorcycle helmet of an employee, Reymar Solas
(Reymar), was stolen at the parking lot within its premises
on November 27, 2009. On December 3, 2009, Security
Officer Francisco Paragas III confirmed a video sequence
recorded on closed-circuit television (CCTV) around 3:00
p.m. on November 27, 2009 showing Farrales taking the
missing helmet from a parked motorcycle, to
wit:chanRoblesvirtualLawlibrary
a. At around 3:07:44, [Farrales] was seen
walking towards the motorcycle parking
lot;chanrobleslaw
b. At around 3:08:47, [Farrales] walked back
towards the pedestrian gate of the company,
passing by the motorcycle parking
lot;chanrobleslaw
c. At around 3:08:51, [Farrales] walked back
towards the motorcycle parking lot and
returned to the pedestrian
gate;chanrobleslaw
 d. At around 3:09:10, [Farrales] called on the
person of Andy Lopega and instructed him to
get the helmet he was pointing at; [and]
e. At around 3:09:30, Andy gave the helmet to
[Farrales].8
Later that day, HPC sent Farrales a notice to explain his
involvement in the alleged theft. The investigation was
supported by the employees’ union, ULO-Hocheng.9Below is
Farrales’ explanation, as summarized by the
CA:chanRoblesvirtualLawlibrary
On November 27, 2009, [Farrales] borrowed a helmet from
his co-worker Eric Libutan (“Eric”) since they reside in the
same barangay. They agreed that Eric could get it at the
house of [Farrales] or the latter could return it the next time
that they will see each other. Eric told him that his
motorcycle was black in color. As there were many
motorcycles with helmets, he asked another employee,
Andy Lopega (“Andy”) who was in the parking area where
he could find Eric’s helmet. Andy handed over to him the
supposed helmet which he believed to be owned by Eric,
then he went home.
On November 28, 2009, at around 6 o’clock in the morning,
he saw Eric at their barangayand told him to get the
helmet. But Eric was in a rush to go to work, he did not
bother to get it.
In the morning of December 3, 2009, upon seeing Eric in
the workplace, [Farrales] asked him why he did not get the
helmet from his house. Eric told him that, “Hindi po sa akin
yung nakuha nyong helmet.” [Farrales] was shocked and he
immediately phoned the HPC’s guard to report the situation
that he mistook the helmet which he thought belonged to
Eric. After several employees were asked as to the
ownership of the helmet, he finally found the owner thereof,
which is Jun Reyes’s (“Jun”) nephew, Reymar, who was with
him on November 27, 2009. [Farrales] promptly apologized
to Jun and undertook to return the helmet the following day
and explained that it was an honest mistake. These all
happened in the morning of December 3, 2009; [Farrales]
did not know yet that HPC will send a letter demanding him
to explain.10
A hearing was held on December 10, 2009 at 1:00 p.m.
Present were Farrales, Eric Libutan (Eric), Andy Lopega
(Andy), Jun Reyes, Antonio Alinda, a witness, and Rolando
Garciso, representing ULO-Hocheng. From Andy it was
learned that at the time of the alleged incident, he was
already seated on his motorcycle and about to leave the
company compound when Farrales approached and asked
him to hand to him a yellow helmet hanging from a
motorcycle parked next to him. When Andy hesitated,
Farrales explained that he owned it, and so Andy complied.
But Eric had specifically told Farrales that his helmet was
colored red and black and his motorcycle was a black Honda
XRM-125 with plate number 8746-DI, parked near the
perimeter fence away from the walkway to the pedestrian
gate. The CCTV showed Farrales instructing Andy to fetch a
yellow helmet from a blue Rossi 110 motorcycle with plate
number 3653-DN parked in the middle of the parking lot,
opposite the location given by Eric. Farrales in his defense
claimed he could no longer remember the details of what
transpired that time, nor could he explain why he missed
Eric’s specific directions.11chanroblesvirtuallawlibrary
On February 15, 2010, the HPC issued a Notice of
Termination12 to Farrales dismissing him for violation of
Article 69, Class A, Item No. 29 of the HPC Code of
Discipline, which provides that “stealing from the company,
its employees and officials, or from its contractors, visitors
or clients,” is akin to serious misconduct and fraud or
willful breach by the employee of the trust reposed in
him by his employer or duly authorized
representative, which are just causes for termination of
employment under Article 282 of the Labor Code.

On March 25, 2010, Farrales filed a complaint for illegal
dismissal, non-payment of appraisal and mid-year bonuses,
service incentive leave pay and 13th month pay. He also
prayed for reinstatement, or in lieu thereof, separation pay
with full backwages, plus moral and exemplary damages
and attorney’s fees. During the mandatory conference, HPC
paid Farrales ?10,914.51, representing his 13th month pay
for the period of January to February 2010 and vacation
leave/sick leave conversion. Farrales agreed to waive his
claim for incentive bonus.13chanroblesvirtuallawlibrary
On April 29, 2011, the LA ruled in favor of
Farrales,14 the fallo of which is as
follows:chanRoblesvirtualLawlibrary
WHEREFORE, PREMISES CONSIDERED, all the respondents
Hocheng Phils. Corporation, Inc. Sam Chen[g] and Judy
Geregale are found guilty of illegal dismissal and ordered
jointly and severally to pay complainant the
following:chanRoblesvirtualLawlibrary
1. Full backwages from date of dismissal on February 15,
2010 until date of decision equivalent to P276,466.67.
2. Separation pay of one (1) month salary per year of
service for a period of twelve years equivalent to
P228,800.00.
3. Appraisal year-end bonus in the sum of P11,000.00.
4. Moral damages in the sum of P200,000.00.
5. Exemplary damages in the sum of P100,000.00.
6. 10% of all sums owing as attorney’s fees or the amount
of P81,626.67.
SO ORDERED.15
On appeal by HPC,16 the NLRC reversed the LA,17 and
denied Farrales’ motion for reconsideration, finding
substantial evidence of just cause to terminate
Farrales.18chanroblesvirtuallawlibrary
On petition for certiorari to the CA,19 Farrales sought to
refute the NLRC’s factual finding that he committed theft, as
well as to question NLRC’s jurisdiction over HPC’s appeal for
non-payment of appeal fees. But the CA found that HPC was
able to perfect its appeal by posting a bond equivalent to
the monetary award of ?897,893.37 and paying the appeal
fees by postal money order in the amount of
?520.00.20chanroblesvirtuallawlibrary
Concerning the substantive issues, the appellate court
agreed with the LA that Farrales’ act of taking Reymar’s
helmet did not amount to theft, holding that HPC failed to
prove that Farrales’ conduct was induced by a perverse and
wrongful intent to gain, in light of the admission of Eric that
he did let Farrales borrow one of his two helmets, only that
Farrales mistook Reymar’s helmet as the one belonging to
him.
Petition for Review to the Supreme Court
In this petition, HPC raises the following grounds for this
Court’s review:chanRoblesvirtualLawlibrary
A. THE HONORABLE [CA] PLAINLY ERRED AND
ACTED CONTRARY TO EXISTING LAW AND
JURISPRUDENCE IN REVERSING THE
DECISION OF THE [NLRC] AND DECLARING
ILLEGAL THE DISMISSAL FOR [HPC’s]
ALLEGED FAILURE TO PROVE THE EXISTENCE
OF JUST CAUSE.
1. THERE IS SUBSTANTIAL EVIDENCE
TO SHOW THAT [FARRALES]
 COMMITTED THEFT IN [HPC’s]
PREMISES.
2. THEFT IS A JUST CAUSE FOR
TERMINATION.
3. BY COMMITTING THEFT,
[FARRALES], BEING A SUPERVISORIAL
EMPLOYEE, FORFEITED THE TRUST
REPOSED IN HIM BY [HPC], THUS
RENDERING HIM DISMISSIBLE FOR
LOSS OF CONFIDENCE.
B. IN DECLARING ILLEGAL THE DISMISSAL OF
[FARRALES], THE HONORABLE [CA]
VIOLATED DOCTRINES LAID DOWN BY THE
SUPREME COURT.
1. COURTS CANNOT SUBSTITUTE
THEIR JUDGMENT FOR THAT OF THE
MANAGEMENT.
2. COURTS MUST ACCORD DUE
RESPECT TO THE FINDINGS OF
ADMINISTRATIVE AGENCIES.21
Chiefly, HPC insists that since the complaint below involves
an administrative case, only substantial evidence, not proof
of guilt beyond reasonable doubt, is required to prove the
guilt of Farrales;22 that what the CA has done is substitute
its judgment for that of the NLRC, which is vested with
statutory duty to make factual determinations based on the
evidence on record.23chanroblesvirtuallawlibrary
Ruling of the Court
The Court resolves to deny the petition.
To validly dismiss an employee, the law requires the
employer to prove the existence of any of the valid or
authorized causes,24 which, as enumerated in Article 282 of
the Labor Code, are: (a) serious misconduct or willful
disobedience by the employee of the lawful orders of his
employer or the latter’s representative in connection with
his work; (b) gross and habitual neglect by the employee of
his duties; (c) fraud or willful breach by the employee of the
trust reposed in him by his employer or his duly authorized
representative; (d) commission of a crime or offense by the
employee against the person of his employer or any
immediate member of his family or his duly authorized
representative; and (e) other causes analogous to the
foregoing.25 As a supervisorial employee, Farrales is
admittedly subject to stricter rules of trust and confidence,
and thus pursuant to its management prerogative HPC
enjoys a wider latitude of discretion to assess his continuing
trustworthiness, than if he were an ordinary rank-and-file
employee.26 HPC therefore insists that only substantial proof
of Farrales’ guilt for theft is needed to establish the just
causes to dismiss him, as the NLRC lengthily asserted in its
decision.
Article 4 of the Labor Code mandates that all doubts in the
implementation and interpretation of the provisions thereof
shall be resolved in favor of labor. Consistent with the
State’s avowed policy to afford protection to labor, as Article
3 of the Labor Code and Section 3, Article XIII of the 1987
Constitution have enunciated, particularly in relation to the
worker’s security of tenure, the Court held that “[t]o be
lawful, the cause for termination must be a serious and
grave malfeasance to justify the deprivation of a means of
livelihood. This is merely in keeping with the spirit of our
Constitution and laws which lean over backwards in favor of
the working class, and mandate that every doubt must be
resolved in their favor.”27 Moreover, the penalty imposed on
the erring employee ought to be proportionate to the
offense, taking into account its nature and surrounding
circumstances.
The Court has always taken care, therefore, that the
employer does not invoke any baseless justification, much
less management prerogative, as a subterfuge by which to
rid himself of an undesirable worker,28and thus in
exceptional cases the Court has never hesitated to delve
into the NLRC’s factual conclusions where evidence was
found insufficient to support them, or too much was
deduced from the bare facts submitted by the parties, or
the LA and the NLRC came up with conflicting positions, as
is true in this case.29chanroblesvirtuallawlibrary
As aptly pointed out by the LA, while HPC has the onus
probandi that the taking of Reymar’s helmet by Farrales
was with intent to gain, it failed to discharge this burden, as
shown by the following circumstances: Farrales sought and
obtained the permission of Eric, his co-employee as well
as barangayco-resident, to borrow his helmet; at the
parking lot, Farrales asked another employee, Andy, to
fetch a yellow helmet from one of the parked motorcycles,
mistakenly thinking it belonged to Eric (whom he knew
owned two helmets); the following day, November 28,
Farrales asked Eric why he had not dropped by his house to
get his helmet, and Eric replied that Farrales got the wrong
helmet because he still had his other helmet with him;
Farrales immediately sought the help of the company
guards to locate the owner of the yellow helmet, who turned
out to be Reymar; Farrales apologized to Reymar for his
mistake, and his apology was promptly accepted.30 All these
circumstances belie HPC’s claim that Farrales took Reymar’s
helmet with intent to gain, the LA said.
In ruling that Farrales’ dismissal by HPC was attended with
utmost malice and bad faith as to justify an award of moral
and exemplary damages and attorney’s fees, the LA stated
that “[i]t is succinctly clear that [the] respondents [therein]
tried to blow out of proportions the indiscretion of [Farrales]
for reasons known only to them,” and moreover, “[f]inding
that the dismissal on the ground of theft is unavailing, [the]
respondents [therein] immediately offered [Farrales] his
former position when he filed [his] complaint. What does
this act of [the] respondents [therein] speak
[of]?”31chanroblesvirtuallawlibrary
On the other hand, the NLRC found that Farrales lied, first,
when he told Andy, then already astride his motorbike at
the parking area and about to leave the company premises,
that the yellow helmet belonged to him,32 and second, when
he claimed that Eric was his neighbor, although they were
not. It ruled as doubtful Farrales’ hazy recollection about
what happened that afternoon at the parking lot, since he
could not even give a description of the motorcycle from
which he took the yellow helmet. These circumstances, the
NLRC determined, comprise substantial proof belying
Farrales’ claim of good faith. As a supervisory employee, he
held a position of high responsibility in the company making
him accountable to stricter rules of trust and confidence
than an ordinary employee, and under Article 282 of the
Labor Code, he is guilty of a serious misconduct and a willful
breach of trust. The NLRC went on to cite a settled policy
that in trying to protect the rights of labor, the law does not
authorize the oppression or self-destruction of the
employer. Management also has its own rights, which as
such, are entitled to respect and enforcement in the interest
of simple fair play.33chanroblesvirtuallawlibrary
But the Court agrees with the CA that Farrales committed
no serious or willful misconduct or disobedience to warrant
his dismissal. It is not disputed that Farrales lost no time in
returning the helmet to Reymar the moment he was
apprised of his mistake by Eric, which proves, according to
the CA, that he was not possessed of a depravity of conduct
as would justify HPC’s claimed loss of trust in him. Farrales
immediately admitted his error to the company guard and
sought help to find the owner of the yellow helmet, and
this, the appellate court said, only shows that Farrales did
indeed mistakenly think that the helmet he took belonged to
Eric.
It is not, then, difficult to surmise that when Farrales told
Andy that the yellow helmet was his, his intent was not to
put up a pretence of ownership over it and thus betray his
intent to gain, as the NLRC held, but rather simply to
assuage Andy’s reluctance to heed his passing request to
reach for the helmet for him; Andy, it will be recalled, was
at that moment already seated in his motorbike and about
to drive out when Farrales made his request. As to Farrales’
claim that he and Eric were neighbors, suffice it to say that
as the CA noted, they resided in the same barangay, and
thus, loosely, were neighbors.
The CA also pointed out that although the alleged theft
occurred within its premises, HPC was not prejudiced in any
way by Farrales’ conduct since the helmet did not belong to
it but to Reymar. In light of Article 69, Class A, Item No. 29
of the HPC Code of Discipline, this observation may be
irrelevant, although it may be that the LA regarded it as
proving HPC’s bad faith.
Theft committed by an employee against a person other
than his employer, if proven by substantial evidence, is a
cause analogous to serious misconduct. 34 Misconduct is
improper or wrong conduct, it is the transgression of some
established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment. The misconduct to
be serious must be of such grave and aggravated character
and not merely trivial or unimportant. Such misconduct,
however serious, must, nevertheless, be in connection with
the employee’s work to constitute just cause for his
separation.35chanroblesvirtuallawlibrary
But where there is no showing of a clear, valid and legal
cause for termination of employment, the law considers the
case a matter of illegal dismissal.36 If doubts exist between
the evidence presented by the employer and that of the
employee, the scales of justice must be tilted in favor of the
latter. The employer must affirmatively show rationally
adequate evidence that the dismissal was for a justifiable
cause.37chanroblesvirtuallawlibrary
Nonetheless, the Court agrees with the CA’s dismissal of the
award of moral and exemplary damages for lack of merit.
There is no satisfactory proof that the concerned officers of
HPC acted in bad faith or with malice in terminating
Farrales. Notwithstanding the LA’s assertion to this effect,
Farrales’ bare allegations of bad faith deserve no credence,
and neither is the mere fact that he was illegally dismissed
sufficient to prove bad faith on the part of HPC’s
officers.38 But concerning the award of attorney’s fees,
Farrales was dismissed for a flimsy charge, and he was
compelled to litigate to secure what is due him which HPC
unjustifiably withheld.
WHEREFORE, premises considered, the petition for review
is DENIED.
SO ORDERED.
 Republic of the Philippines

Supreme Court

Manila x------------------------------------------------------------------------------------x

SECOND DIVISION DECISION

NORMAN YABUT, G.R. No. 190436 REYES, J.:

Petitioner,

Present:
Before us is a petition for review on certiorari under Rule 45 of the
Rules of Civil Procedure which assails the Decision1 dated August
CARPIO, J., 10, 2009 and Resolution2 dated November 26, 2009 of the Court of
Appeals (CA) in the case docketed as CA-G.R. SP No. 96789,
- versus - Chairperson,
entitled “Manila Electric Company (Meralco) and Manuel M. Lopez v.
PEREZ, Norman Yabut and National Labor Relations Commission.”

SERENO,

REYES, and
The Facts
MANILA ELECTRIC COMPANY 
PERLAS-BERNABE, JJ.

and MANUEL M. LOPEZ, Promulgated:

Respondents. This case stems from a complaint for illegal dismissal and monetary
claims filed by herein petitioner Norman Yabut (Yabut) against
January 16, 2012
respondents Manila Electric Company (Meralco) and Meralco officer
Manuel M. Lopez (Lopez).
The petitioner had worked with Meralco from February 1989 until his
dismissal from employment on February 5, 2004. At the time of said
dismissal, he was assigned at the Meralco Malabon Branch Office as
a Branch Field Representative tasked, among other things, to
conduct surveys on service applications, test electric meters,
investigate consumer-applicants' records of Violations of Contract
(VOC) and perform such other duties and functions as may be
required by his superior.
The circumstances antecedent to his dismissal are as follows:
On October 4, 2003, Meralco's Inspection Office issued a
memorandum3 addressed to Meralco's Investigation-Legal Office,
informing it of an illegal service connection at the petitioner's
residence, particularly at No. 17 Earth Street, Meralco Village 8,
Batia, Bocaue, Bulacan. The Inspection Office claimed discovering
shunting wires installed on the meter base for Service Identification
Number (SIN) 708668501, registered under petitioner Yabut's name.
These wires allegedly allowed power transmission to the petitioner's
residence despite the fact that Meralco had earlier disconnected his
electrical service due to his failure to pay his electric bills.
Given this report, Meralco's Head of Investigation-Litigation Office
issued to the petitioner a notice4 dated November 3, 2003, received
by the petitioner's wife on the same day and with pertinent portions
that read:
Please report to our Mr. Rodolfo C. Serra of the
Investigation-Litigation at 8th Floor, Lopez Building,
Meralco Center, Ortigas Avenue, Pasig City
on November 11, 2003, at 9:00 a.m. as the
Inspection had found your disconnected electric
service with SIN No. 708668501 directly connected
by a shunting wire to energize your empty meter
base. If proven true, such act constitutes dishonesty
in violation of Section 7 (3) of the Company Code on
Employee Discipline and/or serious misconduct or
an act analogous to fraud or commission of a crime
under Article 282 (a) and (e) of the Labor Code of
the Philippines.
In this investigation, you are entitled to be assisted
by a counsel or an authorized union representative.
You are also allowed to present evidence and
material witnesses to testify in your favor.
 Should you fail to appear on the aforementioned x x x x6
date, we shall take it to mean that you are waiving
your right to present your side and refute the
aforesaid charge and evidence against you. If you
appear alone, we shall take it to mean that you are
waiving your right to be represented by such counsel
or union representative.5

In the course of the company's investigations, the petitioner

presented his sworn statement7 which was executed with the
assistance of Jose Tullo, the Chief Steward and Vice President of
The offense under Section 7 (3) of Meralco's Company Code on
Meralco's supervisory union First Line Association of Meralco
Employee Discipline referred to in the aforequoted notice is with
Supervisory Employees (FLAMES). Yabut admitted being the
penalty of dismissal on the first offense and is defined as follows:
registered customer of Meralco at No. 17 Earth Street, Meralco
Village 8, Batia, Bocaue, Bulacan. The petitioner claimed that his

SECTION 7. Dishonesty.
The following acts shall constitute violation of this
Section:
xxxx
3) Directly or indirectly tampering
with electric meters or metering
installations of the Company or the
installation of any device, with the
purpose of defrauding the Company.
electrical service was disconnected sometime in July 2003 for unpaid
electric bills. On October 3, 2003, between 10:00 o'clock and 10:30
o'clock in the morning, he was informed by his wife that Meralco
discovered shunting wires on their meter base during an inspection.
The petitioner nonetheless claimed that at about 8:00 o'clock in the
morning of the same day, prior to his wife's notice upon him of the
inspection, he had already given to an officemate the amount
of P8,432.35 and requested that the same be paid to Meralco to
cover his outstanding electric bills. The amount of P8,432.35
plus P1,540 as service deposit was then paid for the petitioner's
account on October 3, 2003 at about 9:30 o'clock in the morning.
Yabut denied knowing the person who installed the discovered
shunting wires. While he did not always go home to their house in
Bulacan as there were times when he stayed in his sister's residence
in Malabon, the petitioner confirmed that he was regularly in his
Bulacan house. His residence had electricity even prior to the full
settlement of his outstanding bills through a connection made to the
line of his neighbor Jojo Clemente.
Photographs taken during Meralco's inspection of Yabut's residence
were also presented to and identified by Yabut. He confirmed that
the inspected meter base was installed within his lot's premises.
Claiming that he had been obtaining electricity from a neighbor, he
argued that shunting wires in his meter base could have caused an
electrical malfunction. As to Meralco's allegation that Yabut's wife
had admitted the petitioner's authorship of the illegal connection,
Yabut denied knowing of such admission.
Meralco’s Litigation – Investigation Office summarized the results of
Meralco's findings in a memorandum 8 dated December 30, 2003. It
indicated that Yabut’s electric service was disconnected on April 3,
2003 for account delinquency. Notwithstanding the disconnection
and the fact that Meralco’s service had not been reconnected,
Yabut's meter registered electric consumption. The memorandum
included the following findings:
While Yabut denied responsibility about the illegal
connection, the pictures taken specifically showing
the shunted wires on the meter base and his wife's
admission that he was the one responsible are
sufficient proofs of his guilt. We give credit to the
admission of his wife as she did it with spontaneity
without force or intimidation in our part. His alibi that
he seldom stayed in his house is controverted by his
admission that within the period in question from
July to October 3, 2003, he stayed home for 24
times. It is surprising that, being a field
representative who has knowledge about illegal
connection, it escaped from his attention the said
illegal connection when it could easily be detected
since his metering point is installed in front of his
house.
We are not inclined to believe that he resorted to
flying connection as it is apparent that at the time his
electric service was disconnected in April, 2003, the
Balagtas Branch found his service to have
registered KWHR consumption from 1555 to 2194
for a total of 639 KWHR indicating that although his
electric service was disconnected, it continued to
register electricity. Moreover, the burden of proof is
upon him to present to us the one responsible but he
failed to do so. In the absence of such proof, it is
concluded that he, being the registered customer
and a resident, was the one who installed the illegal
connection purposely to alleviate the sickly condition
of his wife and two children.9

In view of these findings, respondent Meralco, through its Senior
Assistant Vice President for Human Resources Administration R. A.
Sapitula, issued on February 4, 2004 a notice of
dismissal10 addressed to the petitioner. The notice cites violation of
Section 7, paragraph 3 of Meralco's Company Code on Employee
Discipline and Article 282 (a), (c), (d) and (e) of the Labor Code of
the Philippines as bases for the dismissal. The pertinent portions of
the notice read:
Administrative investigation duly conducted by Legal
established that on October 3, 2003, acting on a tip
that you are resorting to illegal service connection,
the Company's Inspection Squad 7 team found two
(2) shunting wires in an energized empty meter base
installed at your residence at #17 Earth Street,
Meralco Village, Batia, Bocaue, Bulacan. Your wife
admitted that you were the one who installed the
shunted wires on your meter base to have power
because she and your two children were sick. The
illegal connection enabled you to defraud the
company by consuming unregistered electricity
which makes you liable for violation of Section 7,
par. 3 of the Company Code on Employee
Discipline, defined as “(d)irectly or indirectly
tampering with electric meters or metering
installations of the Company or the installation of
any device, with the purpose of defrauding the
Company,” penalized therein with dismissal from the
service.
Under Article 282 of the Labor Code of the
Philippines, the termination of your employment in
Meralco is justified on the following grounds: “(a)
Serious misconduct x x x by the employee x x x in
connection with his work; “(c) Fraud or willful breach
by the employee of the trust reposed in him by his
employer or representative; “(d) Commission of a
crime or offense by the employee against x x x his
employer; and “(e) Other causes analogous to the
foregoing.”
Based on the foregoing, Management is constrained
to dismiss you for cause from the service and
employ of the Company, as you are hereby so
dismissed effective February 5, 2004, with forfeiture
of all rights and privileges.
Aggrieved by the decision of the management, Yabut filed with the
National Labor Relations Commission (NLRC) a complaint11 for
illegal dismissal and money claims against Meralco and Lopez.
The Ruling of the Labor Arbiter
 reinstatement, partially computed as
follows:

On December 28, 2004, Labor Arbiter Antonio R. Macam rendered

his Decision,12 declaring the petitioner illegally dismissed from the
Backwages = [P]240,420.00
service and hence, entitled to reinstatement plus backwages and
attorney's fees. The dispositive portion of his decision reads: 13th Mo. Pay = 24,042.00

_____________________

WHEREFORE, premises all considered, judgment is

hereby rendered, as follows: Total [P]264,462.00

4. Ordering respondents to pay

complainant attorney's fees
1. Declaring the dismissal of complainant as equivalent to 10% of his
illegal; monetary award.

2. Ordering respondents to reinstate All other claims are dismissed for lack of
complainant to his former merit.
position without loss of
seniority rights and
privileges, immediately
upon receipt of this
SO ORDERED.13
decision, either physically or
in the payroll, at the option
of the respondent;

3. Ordering the respondents to pay

complainant his full backwages from
date of dismissal up to actual
The labor arbiter observed that there was no clear and direct
evidence to prove that Yabut performed the shunting of his metering
installation. Furthermore, the act imputed upon Yabut was not
related to the performance of his duties as a Meralco employee, but
as a customer of the company's electric business. Finally, it was
ruled that Meralco failed to observe the twin requirements of due
process in termination cases. The records are bereft of any evidence
showing that the petitioner was apprised of the particular acts or
omissions for which his dismissal was then sought.
Unsatisfied, the respondents appealed from the decision of the labor
arbiter to the NLRC.14
The Ruling of the NLRC
On March 31, 2006, the NLRC rendered its Resolution 15 dismissing
the herein respondents' appeal for lack of merit. Subsequently, the
NLRC denied for lack of merit the respondents’ motion for
reconsideration via a Resolution16 dated August 28, 2006. This
prompted the respondents to file a petition for certiorari with the CA.
The Ruling of the CA
On August 10, 2009, the CA rendered the now assailed
Decision17 reversing the rulings of the NLRC. In finding the
petitioner's dismissal lawful, the appellate court attributed unto Yabut
authorship of the meter tampering and illegal use of electricity – acts
which it regarded as serious misconduct. The Court observed:
The Court notes that the meter base is located
inside respondent Yabut's premises. Manila Electric
Company vs. Court of Appeals said –
“x x x Metro Concast should bear
the responsibility for the tampering
of the facilities within its compound,
which was totally under its
supervision and control. Being
within its control, any resultant
breach in the integrity of the
equipment is indeed attributable to
it.”18 (citation omitted)
The court also ruled that the petitioner's right to due process was not
violated, as he was served the required notices and given sufficient
opportunity to be heard. In view of these, the CA annulled and set
aside the NLRC's resolutions via its decision, the dispositive portion
of which reads:
WHEREFORE, the petition is granted. The resolutions dated
March 31, 2006 and August 28, 2006 are annulled and set
aside.
 SO ORDERED.19
The dismissal
of the
petitioner was
founded on
just causes
Yabut's motion for reconsideration was denied by the CA via a under Article
282 of the
Resolution dated November 26, 2009.20 Hence, the present petition. Labor Code of
the
Philippines.

The Issue

The issue for this Court's determination is: Whether or not the CA
committed an error of law in annulling and setting aside the
resolutions of the NLRC that declared the herein petitioner illegally
dismissed by the respondents.
Article 279 of the Labor Code of the Philippines provides that “(i)n
cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized
by this Title. x x x” The just causes are enumerated in Article 282,
which provides:

The petitioner asserts that he was dismissed from employment

without a valid cause, and that due process prior to his termination Article 282. Termination by employer. - An
employer may terminate an employment for any of
was not observed by the respondents. the following causes:

This Court's Ruling

(a) Serious misconduct or willful

disobedience by the employee of
the lawful orders of his employer or
After study, this Court finds the petition devoid of merit. representative in connection with his
work;
 (b) Gross and habitual neglect by
the employee of his duties;
(c) Fraud or willful breach by the
employee of the trust reposed in him
by his employer or duly authorized
representative;
(d) Commission of a crime or
offense by the employee against the
person of his employer or any
immediate member of his family or
his duly authorized representative;
and
(e) Other causes analogous to the
foregoing.
The requirement for a just cause was satisfied in this case. We note
that the petitioner's employment was terminated by the herein
respondents for violation of Section 7, par. 3 of Meralco's Company
Code on Employee Discipline, and for the existence of just cause
under Article 282 (a), (c), (d) and (e) of the Labor Code.
The petitioner's violation of the company rules was evident. While he
denies any involvement in the installation of the shunting wires which
Meralco discovered, it is significant that said SIN 708668501 is
registered under his name, and its meter base is situated within the
premises of his property. Said meter registered electric consumption
during the time his electric service was officially disconnected by
Meralco. It was the petitioner and his family who could have
benefited from the illegal connection, being the residents of the area
covered by the service. His claim that he failed to know or even
notice the shunted wires fails to persuade as we consider the meter
located in the front of his house, the nature of his work as branch
field representative, his long-time employment with Meralco and his
familiarity with illegal connections of this kind.
The logical conclusion that may be deduced from these attending
circumstances is that the petitioner was a party, or at the very least,
one who agreed to the installation of the shunted wires, and who
also benefited from the illegal connection at the expense of his
employer-company. In sustaining the CA's findings, we consider the
rule that in administrative and quasi-judicial proceedings, as in
proceedings before the NLRC which had original jurisdiction over the
complaint for illegal dismissal, the quantum of proof necessary is
substantial evidence or such relevant evidence as a reasonable mind
may accept as adequate to support a conclusion.21
Significantly, “(t)ampering with electric meters or metering
installations of the Company or the installation of any device, with the
purpose of defrauding the Company” is classified as an act of
dishonesty from Meralco employees, expressly prohibited under
company rules. It is reasonable that its commission is classified as a
severe act of dishonesty, punishable by dismissal even on its first
commission, given the nature and gravity of the offense and the fact
that it is a grave wrong directed against their employer.
To reiterate, Article 282 (a) provides that an employer may terminate
an employment because of an employee's serious misconduct, a
cause that was present in this case in view of the petitioner's
violation of his employer's code of conduct. Misconduct is defined as
the “transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment.” For serious
misconduct to justify dismissal, the following requisites must be
present: (a) it must be serious; (b) it must relate to the performance
of the employee's duties; and (c) it must show that the employee has
become unfit to continue working for the employer. 22
In reviewing the CA’s Decision, we again consider the petitioner's
duties and powers as a Meralco employee. And we conclude that he
committed a serious misconduct. Installation of shunting wires is
without doubt a serious wrong as it demonstrates an act that is willful
or deliberate, pursued solely to wrongfully obtain electric power
through unlawful means. The act clearly relates to the petitioner's
performance of his duties given his position as branch field
representative who is equipped with knowledge on meter operations,
and who has the duty to test electric meters and handle customers'
violations of contract. Instead of protecting the company’s interest,
the petitioner himself used his knowledge to illegally obtain electric
power from Meralco. His involvement in this incident deems him no
longer fit to continue performing his functions for respondent-
company.
While the installation of the shunted wires benefited the herein
petitioner as a customer of Meralco, his act cannot be fully severed
from his status as the respondent's employee. As correctly observed
by the CA, “(i)t is an offense against the Company Code of
Employee Discipline. As a field representative, he is knowledgeable
on the mechanics of meter and metering installation.”23
The dismissal is also justified as the act imputed upon the petitioner
qualifies as “fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative”
under Article 282 (c) of the Labor Code. While the petitioner contests
this ground by denying that his position is one of trust and
confidence, it is undisputed that at the time of his dismissal, he was
holding a supervisory position after he rose from the ranks since
commencement of his employment with Meralco. As a supervisor
with duty and power that included testing of service meters and
investigation of violations of contract of customers, his position can
be treated as one of trust and confidence, requiring a high degree of
honesty as compared with ordinary rank-and-file employees. This
Court declared in The Coca-Cola Export Corporation v. Gacayan:24
Law and jurisprudence have long recognized the
right of employers to dismiss employees by reason
of loss of trust and confidence. More so, in the case
of supervisors or personnel occupying positions of
responsibility, loss of trust justifies termination. Loss
of confidence as a just cause for termination of
employment is premised from the fact that an
employee concerned holds a position of trust and
confidence. This situation holds where a person is
entrusted with confidence on delicate matters, such
as the custody, handling, or care and protection of
the employer's property. But, in order to constitute a
just cause for dismissal, the act complained of must
be “work-related” such as would show the employee
concerned to be unfit to continue working for the
employer.25 (citations omitted)
In this case, the acts complained of were clearly work-related
because they related to matters the petitioner handled as branch
field representative. Taking into account the results of its
investigations, Meralco cannot be expected to trust Yabut to properly
perform his functions and to meet the demands of his job. His
dishonesty, involvement in theft and tampering of electric meters
clearly prejudice respondent Meralco, since he failed to perform the
duties which he was expected to perform.
Considering the foregoing, this Court agrees that there were just
causes for the petitioner's dismissal. We emphasize that dismissal of
a dishonest employee is to the best interest not only of the
management but also of labor. As a measure of self-protection
against acts inimical to its interest, a company has the right to
dismiss its erring employees. An employer cannot be compelled to
continue employing an employee guilty of acts inimical to the
employer’s interest, justifying loss of confidence in him.26
The
requirements
of procedural
due process
were satisfied.
On the matter of procedural due process, it is well-settled that notice
and hearing constitute the essential elements of due process in the
dismissal of employees. The employer must furnish the employee
with two written notices before termination of employment can be
legally effected. The first apprises the employee of the particular acts
or omissions for which dismissal is sought. The second informs the
employee of the employer's decision to dismiss him. With regard to
the requirement of a hearing, the essence of due process lies simply
in an opportunity to be heard, and not that an actual hearing should
always and indispensably be held.27
These requirements were satisfied in this case. The first required
notice was dated November 3, 2003, sufficiently notifying the
petitioner of the particular acts being imputed against him, as well as
the applicable law and the company rules considered to have been
violated. Notably, in his sworn statement dated November 17, 2003,
the petitioner admitted receiving Meralco's notice of investigation
dated November 3, 2003, to wit:
37. T. Natanggap mo ba yong notice ng investigation na
may petsang November 3, 2003 na personally na
ipinadala namin sa iyo sa bahay mo na may
numerong 17 Earth St., Meralco Village 8, Batia,
Bocaue, Bulacan?
S. Opo.
38. T. Ipinapakita ko sa iyo ang isang notice ng
investigation na may petsang November 3, 2003 na
naka-addressed (sic) sa isang Mr. Norman C. Yabut
ng 17 Earth Street, Meralco Village 8, Batia,
Bocaue, Bulacan at ang may lagda ay si Atty. J.R.T.
Albarico, head ng Investigation-Litigation ng
Meralco. Dito sa nasabing notice ay may nakalagay
sa ibaba na received by Salvacio (sic) M. Yabut na
may kanyang pirma, at nakalagay din ang date na
11/03/03 at ang nakalagay sa relationship ay wife.
Ano ang masasabi mo tungkol sa bagay na ito.
S. Ito po yong notice ng investigation na aking
natanggap at ang nakatanggap nito ay ang aking
misis na si Maria Salvacion Yabut.28
On November 17, 2003, Meralco conducted a hearing on the
charges against the petitioner. During said time, the petitioner was
accorded the right to air his side and present his defenses on the
charges against him. Significantly, a high-ranking officer of the
supervisory union of Meralco assisted him during the said
investigation. His sworn statement29 that forms part of the case
records even listed the matters that were raised during the
investigation.
Finally, Meralco served a notice of dismissal dated February 4, 2004
upon the petitioner. Such notice notified the latter of the company's
decision to dismiss him from employment on the grounds clearly
discussed therein.

WHEREFORE, in view of the foregoing, the petition for review

on certiorari is hereby DENIED. The assailed Decision dated August
10, 2009 and Resolution dated November 26, 2009 of the CA in CA-
G.R. SP No. 96789 are hereby AFFIRMED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 173189 February 13, 2013
JONATHAN I. SANG-AN, Petitioner,
vs.
EQUATOR KNIGHTS DETECTIVE AND SECURITY AGENCY,
INC., Respondents.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 filed by
petitioner Jonathan I. Sang-an assailing the decision2 dated
September 29, 2005 and the resolution3 dated May 29, 2006 of
the Court of Appeals (CA) in CA-G.R. SP. No. 86677. TheCA set
aside the decision4 dated December 15, 2003 of the National
Labor Relations Commission (NLRC) and reinstated the
decision5 dated July 30, 200 I of Labor Arbiter Geoffrey P.
Villahermosa (LA).
The Facts
Jonathan was the Assistant Operation Manager of respondent
Equator Knights Detective and Security Agency, Inc. (Equator).
He was tasked, among others, with the duty of assisting in the
operations of the security services; he was also in charge of
safekeeping Equator’s firearms.
On April 21, 2001, Equator discovered that two firearms were
missing from its inventory. The investigation revealed that it
was Jonathan who might have been responsible for the loss.6 On
April 24, 2001, Jonathan was temporarily suspended from
work pending further investigation.
On May 8, 2001, while Jonathan was under suspension, a
security guard from Equator was apprehended by policemen for
violating the Commission on Elections’ gun ban rule. The security
guard stated in his affidavit7 that the unlicensed firearm had
been issued to him by Jonathan.
On May 24, 2001, Jonathan filed with the NLRC a complaint for
illegal suspension with prayer for reinstatement.8 In his
position paper, however, he treated his case as one for illegal
dismissal and alleged that he had been denied due process when
he was dismissed.9 Equator, on the other hand, argued that
Jonathan’s dismissal was not illegal but was instead for a just
cause under Article 282 of the Labor Code.10
On July 30, 2001, the LA rendered a decision11 dismissing the
complaint. It declared that no illegal dismissal took place as
Jonathan’s services were terminated pursuant to a just cause.
The LA found that Jonathan was dismissed due to the two
infractions he committed:
The basis for the termination of the complainant was first, when
he was suspended when he issued a firearm [to] a security guard
and then replaced it with another one, then took the
respondent[’s] firearm with him and since then both firearms were
lost. x x x.
xxxx
His second offense which resulted in his being terminated was
when he issued an unlicensed firearm to a Security Guard
stationed in one of the business establishment[s] in Bais City
which is a client of the respondents.
xxxx
WHEREFORE, in the light of the foregoing, judgment is hereby
rendered DISMISSING this case for lack of legal and factual
basis.12
Jonathan appealed the LA’s decision to the NLRC, contending
that no charge had been laid against him; there was no hearing or
investigation of any kind; and he was not given any chance or
opportunity to defend himself.
The NLRC sustained the findings of the LA that there had
been just cause for his dismissal. However, it found that
Jonathan had been denied his right to due process when he
was dismissed. It held that Equator’s letter informing him of his
temporary suspension until further notice did not satisfy the
requirements of due process for a valid dismissal. Thus, the
NLRC modified the LA’s decision and ordered Equator to pay
Jonathan backwages from April 24, 2001 until the date of the
NLRC’s decision. Equator moved for reconsideration but the
NLRC denied the motion, prompting the filing of a petition
for certiorari under Rule 65 of the Rules of Court with the CA.
Equator argued that the NLRC committed grave abuse of
discretion when it found that Jonathan had been denied
procedural due process.
The CA reversed the decision of the NLRC, finding that Equator
substantially complied with the procedural requirements of due
process. It found that the letter given to Jonathan did not mean
that he had been dismissed; rather, he was only suspended – the
very reason for the case for illegal suspension Jonathan filed
before the LA.1âw phi 1
The CA found that Jonathan filed his complaint for illegal
suspension on May 2, 2001. During the pendency of the illegal
suspension case before the LA, Jonathan committed another
offense on May 8, 2001 when he issued the unlicensed firearm to
Equator’s security guard. The CA found that Equator’s June 7,
2001 position paper brought Jonathan’s second offense before
the LA for resolution; thus, Jonathan was not denied due
process. The CA reinstated the LA’s decision dismissing
Jonathan’s complaint. Jonathan filed a motion for
reconsideration which the CA denied. He thereafter filed the
present petition.
The Parties’ Arguments
Jonathan contends that when Equator filed a petition
for certiorari under Rule 65 of the Rules of Court alleging grave
abuse of discretion by the NLRC, it failed to post a cash or surety
bond as required by Article 223 of the Labor Code. Without
complying with this condition, the petition for certiorari should
have been dismissed outright. Also, Jonathan contends that the
CA’s findings of fact are contrary to the findings of fact by the
NLRC. Since the findings of fact of quasi-judicial agencies are
accorded respect and finality, he argues that the NLRC’s decision
must be sustained.
Equator, on the other hand, submits that the rule on posting of
cash or surety bond as required by Article 223 of the Labor Code
is not applicable in a petition for certiorari under Rule 65 of the
Rules of Court. It also submits that both the LA and the NLRC
concur in finding just cause for the dismissal of Jonathan; hence,
Jonathan’s subsequent dismissal is valid.
The Issues
Given the parties’ arguments, the case poses the following issues
for the Court’s resolution:
1. whether the posting of a cash or surety bond is
required for the filing of a petition for certiorari under Rule
65 of the Rules of Court with the CA; and
2. whether Jonathan was validly dismissed.
The Court’s Ruling
We find the petition partially meritorious.
A cash/surety bond is not needed in a Petition for Certiorari
under Rule 65
The requirement of a cash or surety bond as provided under
Article 223 of the Labor Code only applies to appeals from the
orders of the LA to the NLRC. It does not apply to special civil
actions such as a petition for certiorari under Rule 65 of the Rules
of Court. In fact, nowhere under Rule 65 does it state that a bond
is required for the filing of the petition.
A petition for certiorari is an original and independent action and
is not part of the proceedings that resulted in the judgment or
order assailed before the CA. It deals with the issue of
jurisdiction, and may be directed against an interlocutory order of
the lower court or tribunal prior to an appeal from the judgment, or
to a final judgment where there is no appeal or any plain, speedy
or adequate remedy provided by law or by the rules.
Jonathan filed a complaint for illegal dismissal
Contrary to the findings of the CA, Jonathan was not merely
suspended but was dismissed from the service. While Jonathan
initially filed an action for illegal suspension, the position papers
both parties filed treated the case as one for illegal dismissal.
Jonathan alleged in his position paper that "the [r]espondent
illegally SUSPENDED (DISMISSED) the x x x complainant[,]" and
claimed that his dismissal lacked the required due
process.13 Similarly, Equator’s position paper states that after the
commission of the second offense on May 8, 2001,
"[management] made up a decision to
dismiss [Jonathan]."14 Even the LA treated the case before him
as "a case for illegal dismissal[.]"15 In Equator’s memorandum to
this Court, it admitted that Jonathan was dismissed.16
We also find that Jonathan did not file his complaint for illegal
suspension on May 2, 2001. The records of the case disclose that
the receiving date stamped on the complaint is May 24, 2001.
The date relied upon by the CA, May 2, 2001, was the date when
the complaint was subscribed and sworn to before a notary
public.17 Due to the second offense committed by Jonathan on
May 8, 2001, Equator decided to dismiss him. Therefore, when
the LA tried the case, Jonathan had already been dismissed.
Equator failed to comply with the procedural due process
In order to validly dismiss an employee, it is fundamental that the
employer observe both substantive and procedural due process –
the termination of employment must be based on a just or
authorized cause and the dismissal can only be effected, after
due notice and hearing.18
This Court finds that Equator complied with the substantive
requirements of due process when Jonathan committed the two
offenses.
Article 282(A) of the Labor Code provides that an employee may
be dismissed on the ground of serious misconduct or willful
disobedience of the lawful orders of his employer or
representative in connection with his work. Misconduct is
improper or wrongful conduct; it is the transgression of some
established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent
and not mere error of judgment. The misconduct, to be serious
within the meaning of the Labor Code, must be of such grave and
aggravated character and not merely trivial or unimportant. It is
also important that the misconduct be in connection with the
employee's work to constitute just cause for his separation.19
By losing two firearms and issuing an unlicensed firearm,
Jonathan committed serious misconduct. He did not merely
violate a company policy; he violated the law itself (Presidential
Decree No. 1866 or Codifying the Laws on Illegal/Unlawful
Possession, Manufacture, Dealing in, Acquisition or Disposition,
of Firearms, Ammunition or Explosives or Instruments Used in the
Manufacture of Firearms, Ammunition or Explosives, and
Imposing Stiffer Penalties for Certain Violations Thereof and for
Relevant Purposes),20 and placed Equator and its employees at
risk of being made legally liable. Thus, Equator had a valid
reason that warranted Jonathan’s dismissal from employment as
Assistant Operation Manager.
The Court, however, finds that Equator failed to observe the
proper procedure in terminating Jonathan’s services. Section 2,
Rule XXIII, Book V of the Omnibus Rules Implementing the Labor
Code provides that:
Section 2. Standard of due process: requirements of notice. – In
all cases of termination of employment, the following standards of
due process shall be substantially observed.
I. For termination of employment based on just causes as defined
in Article 282 of the Labor Code:
(a) A written notice served on the employee specifying the
ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain
his side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee
so desires, is given opportunity to respond to the charge,
present his evidence, or rebut the evidence presented
against him; and
(c) A written notice [of] termination served on the
employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify
his termination.21
Jurisprudence has expounded on the guarantee of due process,
requiring the employer to furnish the employee with two written
notices before termination of employment can be effected: a first
written notice that informs the employee of the particular acts or
omissions for which his or her dismissal is sought, and a second
written notice which informs the employee of the employer's
decision to dismiss him. In considering whether the charge in the
first notice is sufficient to warrant dismissal under the second
notice, the employer must afford the employee ample opportunity
to be heard.
A review of the records shows that Jonathan was not furnished
with any written notice that informed him of the acts he committed
justifying his dismissal from employment. The notice of
suspension given to Jonathan only pertained to the first
offense, i.e., the loss of Equator’s firearms under Jonathan’s
watch. With respect to his second offense (i.e., the issuance of
1âw phi 1
an unlicensed firearm to Equator’s security guard – that became
the basis for his dismissal), Jonathan was never given any notice
that allowed him to air his side and to avail of the guaranteed
opportunity to be heard. That Equator brought the second offense
before the LA does not serve as notice because by then,
Jonathan had already been dismissed.
In order to validly dismiss an employee, the observance of both
substantive and procedural due process by the employer is a
condition sine qua non. Procedural due process requires that the
employee be given a notice of the charge against him, an ample
opportunity to be heard, and a notice of termination.22
Since Jonathan had been dismissed in violation of his right to
procedural due process but for a just cause, Equator should pay
him nominal damages of ₱30,000.00, in accordance with Agabon
v. NLRC.23 The decision of the NLRC, although final, was brought
to CA on a petition for certiorari and was eventually nullified for
grave abuse of discretion. When the CA ruled on the case, this
Court had abandoned the ruling in Serrano v. NLRC24 in favor of
the Agabon ruling.
WHEREFORE, we hereby PARTIALLY GRANT the petition. The
decision dated September 29, 2005 and the resolution dated May
29, 2006 of the Court of Appeals in CA-G.R. SP. No. 86677
are AFFIRMED with MODIFICATION. The employer, Equator
Knights Detective and Security Agency, Inc., had sut1icient basis
to terminate the employment of Jonathan I. Sang-an whose
dismissal is thus declared to be substantively valid. However, he
was denied his right to procedural due process for lack of the
required notice of dismissal. Consequently, Equator Knights
Detective and Security Agency, Inc. is ordered to pay petitioner
Jonathan I. Sang-an ₱30,000.00 as nominal damages for its non-
compliance with procedural due process.

SO ORDERED.
 THIRD DIVISION
penalty. The appellate court determined that the suspension of the respondent
for five months without salary as just penalty.
JANSSEN PHARMACEUTICA, G. R. No . 1 7 2 5 2 8
Petitioner,
Present: Petitioner is the division of Johnson & Johnson Philippines Inc. engaged in

YNARES-SANTIAGO, J., the sale and manufacture of pharmaceutical products. In 1989, petitioner
Chairperson, employed respondent as Territory/Medical Representative. During his
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO, employment, respondent received from petitioner several awards and
NACHURA, and
citations for the years 1990 to 1997, such as Territory Representative Award,
REYES, JJ.
Quota Buster Award, Sipag Award, Safety Drivers Award, Ring Club

Promulgated: Award, and a Nomination as one of the Ten Outstanding Philippine

BENJAMIN A. SILAYRO, Salesmen.[3] On the dark side, however, respondent was also investigated for,
Re sp o nd e n t. February 26, 2008
x-------------------------------------------------x and in some cases found guilty of, several administrative charges.

DECISION Petitioner alleged that in 1994, respondent was found guilty of

granting unauthorized premium/free goods to and unauthorized pull-outs
CHICO-NAZARIO, J.: from customers.[4]Petitioner failed to attach records to support its allegation
and to explain the nature of and the circumstance surrounding these

This is a petition for review on certiorari under Rule 45 of the Rules of Court, infractions. Respondent, for his part, admitted to have been guilty of granting

assailing the Decision,[1] dated 8 February 2006, promulgated by the Court of unauthorized premium/free goods, but vehemently denied violating the rule

Appeals in CA-G.R. SP No. 81983, reversing the Decision[2] dated 7 May on, or having been charged with, unauthorized pull-outs from customers.[5]

2003 of the National Labor Relations Commission (NLRC) in NLRC Case

No. V-000880-99. The Court of Appeals, in its assailed Decision, adjudged The respondent was also investigated for dishonesty in connection with the

the dismissal of respondent Benjamin Silayro by petitioner Rewards of Learning (ROL) test. The ROL test is a one-page take-home

Jansen Pharmaceutica as illegal for being an excessive and unwarranted examination, with two questions to be answered by an enumeration of the
standards of performance by which territory representatives are rated as well
as the sales competencies expected of territory representatives. [6] It was
discovered that respondents answers were written in the handwriting of a co-
employee, Joedito Gasendo. Petitioners management then sent respondent a
Memo dated 27 July 1998 requiring an explanation for the incident. [7]
Soon thereafter, petitioner sent a subsequent Memo dated 20 August 1998 to
respondent requiring the latter to explain his delay in submitting process
reports.[8]
On 8 September 1998, respondent submitted a written explanation to the
petitioner stating that the delay in the submission of reports was caused by
the deaths of his grandmother and his aunt, and the hospitalization of his
mother. He also averred that he had asked his co-
employee Joedito Gasendo to write his answers to the ROL test because at
the time when the examination was due, he already needed to leave to see his
father-in-law, who was suffering from cancer and confined in a hospital in
Manila.[9]
Respondent was sent a new Memorandum dated 20 October 1998 for his
delayed submission of process reports due on 14 October 1998.[10]
Respondent was issued another Memo also dated 20 October 1998
regarding the discrepancies between the number of product samples recorded
in his Daily/Weekly Coverage Report (DCR) and the number of product
samples found in his possession during the 14 October 1998 audit. [11] The
actual number of sample products found in respondents possession exceeded
the number of sample products he reported to petitioner.
Respondent explained, through a Response Memo dated 24 October
1998, that he failed to count the quantity of samples when they were placed
in his custody.Thus, he failed to take note of the excess samples from
previous months. He, likewise, admitted to committing errors in posting the
samples that he distributed to some doctors during the months of August and
September 1998.[12]
On 20 November 1998, petitioner issued a Notice of Disciplinary Action
finding respondent guilty of the following offenses (1) delayed submission
of process reports, for which he was subjected to a one-day suspension
without pay, effective 24 November 1998;[13] and (2) cheating in his ROL
test, for which he was subjected again to a one-day suspension.[14]
On the same date, petitioner likewise issued a Notice of Preventive
Suspension against respondent for Dishonesty in Accomplishing Other
Accountable Documents in connection with the discrepancy between the
quantities of sample products in respondents report and the petitioners audit
for the September 1998 cycle. In addition, the Notice directed the respondent
to surrender to the petitioner the car, promotional materials, and all other
accountabilities on or before 25 November 1998. It was also stated therein
that since this was respondents third offense for the year, he could be
dismissed under Section 9.5.5(c) of petitioners Code of Conduct.[15]
Before 25 November 1998 or the date given by petitioner for respondent to
surrender all his accountabilities, a Memorandum dated 24 November 1998
was issued to respondent for the following alleged infractions: (1) Failure to
turn over company vehicles assigned after the receipt of instruction to that
effect from superiors, and (2) Refusing or neglecting to obey Company
management orders to perform work without justifiable reason. [16]
Respondent wrote a letter dated 26 November 1998 addressed to the
petitioner explaining that he failed to surrender his accountabilities because
he thought that this was tantamount to an admission that the charges against
him were true and, thus, could result in his termination from the job. [17]
An administrative investigation of the respondents case was held on 3
December 1998. Respondent was accompanied by union representative
Lyndon Lim. The parties discussed matters concerning the discrepancy in
respondents report and petitioners audit on the number of product samples in
respondents custody in September 1998. They were also able to clarify
among themselves respondents failure to return his accountabilities and, as a
consequence, respondent promised to surrender the same. They further
agreed that another administrative hearing will be set, but no further hearings
were held.[18]
In line with his promise to surrender his accountabilities, respondent
wrote a letter, dated 9 December 1998, asking his superiors where he should
return his accountabilities.[19] Union representative Dominic Regoro also
made requests, on behalf of respondent, for instructions, to whom petitioners
District Supervisor Raymond Bernardo replied via electronic mail on 16
December 1998. According to Bernardo, he was still in the process of making
arrangements with Ruben Cauton, petitioners National Sales Manager, in
connection with the return of respondents accountabilities. [20] Respondent
maintained that he did not receive any instructions from petitioner.
In a letter dated 28 December 1998, petitioner terminated the
services of respondent.[21] Petitioner found respondent guilty of dishonesty in
accomplishing the report on the number of product samples in his possession
and failing to return the company vehicle and his other accountabilities in
violation of Sections 9.2.9 and 9.2.4 of the Code of Conduct.[22] Petitioner
also found respondent to be a habitual offender whose previous offenses
included: (1) Granting unauthorized premium/free goods to customer in
1994; (2) Unauthorized pull-out of stocks from customer in 1994; (3) Delay
in submission of reports despite oral admonition and written reprimand in
1998; and (4) Dishonesty in accomplishing other accountable documents or
instruments (in connection with the ROL test) in 1998.
Even after respondents termination from employment, there was
still contact between petitioner and respondent regarding the latters
accountabilities still in his possession. Sometime in early 1999, in a telephone
conversation, respondent informed petitioner that he will return his
accountabilities only upon demand from the proper governmental
agency.[23] A demand letter dated 3 February 1999 was sent to respondent by
petitioner ordering the return of the company car, promotional materials,
samples, a slide projector, product manuals, product monographs, and
training binders.[24]
 On 14 January 1999, respondent filed a Complaint[25] against
WHEREFORE, premises considered,
petitioner and its officers, Rafael Besa, Rueben Cauton, Victor Lapid, and complainants appeal is hereby DISMISSED. The decision
Raymond Bernardo before the Sub-Regional Arbitration Branch of the of the Labor Arbiter is
hereby AFFIRMED with MODIFICATIONdeleting the
NLRC in Iloilo City for (a) Unfair Labor Practice; (b) Illegal Dismissal; (c) award of reinstatement.[29]
Reimbursement of operating and representation expenses under expense
reports for October and November 1998; (d) Nonpayment of salary, bonuses
Respondent filed a Petition for Certiorari under Rule 65 of the
and other earned benefits for December 1998 like rice allocation, free goods
Rules of Court before the Court of Appeals. In reversing the Decision of the
allocation, etc.; and (e) Damages and attorneys fees.
NLRC, the appellate court pronounced that the causes were insufficient for
the dismissal of respondent since respondents acts were not motivated by
In a Decision dated 31 August 1999, the Labor Arbiter ruled that
dishonesty, but were caused by mere inadvertence. Thus, it concluded that
respondent committed infractions which breached company rules, and which
the offenses committed by respondent merited only a penalty of suspension
were sufficient grounds for dismissal. However, the Labor Arbiter found the
for five months without pay. The appellate court also noted that petitioner
penalty of dismissal to be too harsh considering the respondents
committed some lapses in its compliance with procedural due process. It
circumstances and ordered his reinstatement without payment of back
further took into account the successive deaths and sickness in respondents
wages.[26] The dispositive portion of the Decision states that:
family.[30] The dispositive part of the decision reads:

WHEREFORE, premises considered, judgment is

rendered ordering respondents firm to reinstate
complainant to his former or equivalent position without
backwages.
All other claims are hereby dismissed.[27]
WHEREFORE, premises considered, the petition
is GRANTED. Thus, the Decision and Resolution
respectively dated 7 May 2003 and 14 October 2003 are
hereby SET ASIDE. Accordingly, Judgment is hereby
rendered:

a) Declaring petitioners dismissal to be illegal;

On appeal, the NLRC modified the Decision of the Labor Arbiter by
declaring that reinstatement was improper where respondent was dismissed
for just and authorized causes.[28] In a Decision dated 7 May 2003, it
pronounced that:
b) Reinstating petitioner to the same or equivalent
position without loss of seniority rights and other
privileges;
c) Ordering the payment of backwages (inclusive of
allowances and other benefits or their monetary
 equivalent), computed from the time BREACH OF TRUST AND CONFIDENCE REPOSED
compensation was withheld up to the time of IN HIM BY THE COMPANY UNDER THE
actual reinstatement; Provided that, from such PROVISIONS OF THE LABOR CODE WAS LEGAL,
computed amount of backwages, a deduction of VALID AND CARRIED OUT WITH DUE PROCESS
five (5) months (sic) salary be made to serve as
penalty; and III

d) If reinstatement is no longer feasible, WHETHER OR NOT THE TOTALITY OF

ordering the payment of separation pay INFRACTIONS COMMITTED BY RESPONDENT
comprising of one month salary per year of FURTHER MERITED HIS TERMINATION FROM THE
service computed from date of employment up to COMPANYS EMPLOY
finality of this decision, in addition to the award
of backwages. IV

Let the records of this case be remanded to the WHETHER OR NOT THE RESPONDENT HAS ANY
Labor Ariter a quo for the proper computation of the BASIS FOR CLAIMING AN AWARD OF
foregoing.[31] REINSTATEMENT AND BACKWAGES.[32]

Hence, this Petition, wherein the following issues were raised: This petition is without merit.

I
The main question in this case is whether or not sufficient grounds
WHETHER OR NOT THE COURT OF APPEALS existed for the dismissal of the respondent. To constitute a valid dismissal
GRAVELY ERRED IN REVERSING THE UNIFORM
FACTUAL FINDINGS OF THE NLRC AND THE from employment, two requisites must concur: (1) the dismissal must be for
LABOR ARBITER. any of the causes provided in Article 282 of the Labor Code; and, (2) the
II employee must be given an opportunity to be heard and to defend himself. [33]

WHETHER OR NOT RESPONDENTS DISMISSAL

FOR HIS FAILURE TO TRUTHFULLY ACCOMPLISH In this case, the Court must re-examine the factual findings of the
REPORTS, DELIBERATE AND REPEATED FAILURE
Court of Appeals, as well as the contrary findings of the NLRC and Labor
TO SUBMIT REQUIRED REPORTS AND HIS
DELIBERATE DISREGARD OF HIS SUPERIORS Arbiter. While it is a recognized principle that this Court is not a trier of facts
ORDER TO SURRENDER HIS ACCOUNTABILITIES
TANTAMOUNT TO DISHONESTY, GROSS AND and does not normally embark in the evaluation of evidence adduced during
HABITUAL NEGLECT OF DUTY, WILLFUL trial, this rule allows for exceptions.[34] One of these exceptions covers
DISOBEDIENCE OF COMPANY POLICY, AND
instances when the findings of fact of the trial court, or in this case of the
quasi-judicial agencies concerned, are conflicting or contradictory with those
of the Court of Appeals.[35]
In the termination letter dated 28 December 1998, respondent was
dismissed on the ground that he committed the following offenses: (1)
dishonesty in accomplishing the report on the number of product samples in
his possession; and (2) his failure to return the company vehicle and other
accountabilities in violation of Sections 9.2.9 and 9.2.4 of the Code of
Conduct. In addition to these offenses, petitioner took into account that the
petitioner committed the following infractions in the past: (1) granting
unauthorized premium/free goods in 1994; (2) unauthorized pull-outs from
customers in 1995; (3) cheating during the ROL exam in 1998; and (4) three
infractions of delayed process reports in 1998.
Initially, the Court must determine whether the respondent violated
the Code of Conduct with his dishonesty in accomplishing his report on
product samples and/or failure to return the company vehicle and other such
accountabilities. The records of this case negate a finding of such culpability
on the part of the respondent.
Petitioner failed to present evidence that respondent was guilty of
dishonesty in accomplishing the DCR, wherein he was supposed to indicate
the number of product samples in his possession for August and September
1998. Petitioner merely relied on the fact that the number of product samples
the respondent reported was incorrect, and the number of product samples
later found in his possession exceeded that which he reported. Respondent
admitted that when the product samples had arrived, he failed to check if the
number of product samples indicated in the DCR corresponded to the number
actually delivered and that he made mistakes in posting the product samples
distributed during the period in question.
In termination cases, the burden of proof rests with the employer to
show that the dismissal is for just and valid cause. Failure to do so would
necessarily mean that the dismissal was not justified and therefore was
illegal.[36] Dishonesty is a serious charge, which the employer must
adequately prove, especially when it is the basis for termination.
In this case, petitioner had not been able to identify an act of
dishonesty, misappropriation, or any illicit act, which the respondent may
have committed in connection with the erroneously reported product
samples. While respondent was admittedly negligent in filling out his August
and September 1998 DCR, his errors alone are insufficient evidence of a
dishonest purpose. Since fraud implies willfulness or wrongful intent, the
innocent non-disclosure of or inadvertent errors in declaring facts by the
employee to the employer will not constitute a just cause for the dismissal of
the employee.[37] In addition, the subsequent acts of respondent belie a design
to misappropriate product samples. So as to escape any liability, respondent
could have easily just submitted for audit only the number of product samples
which he reported. Instead, respondent brought all the product samples in his
custody during the audit and, afterwards, honestly admitted to his
negligence.Negligence is defined as the failure to exercise the standard of
care that a reasonably prudent person would have exercised in a similar dismissed the respondent on 28 December 1998 for deliberately refusing to
situation.[38] To this Court, respondent did not commit any willful violation, surrender his accountabilities, among other grounds. The petitioner does not
rather he merely failed to exercise the standard care required of a territory refer in its pleadings to any instance after the company hearing was held and
representative to carefully count the number of product samples delivered to before the respondent was dismissed wherein it had finally instructed the
him in August and September 1998. respondent as to how he may turn over his accountabilities. Per petitioners
pleadings, belated demands for the surrender of respondents accountabilities
In the Memorandum dated 20 November 1998, petitioner ordered were made in January and February 1999, after respondent had already been
respondent to return the company vehicle and all other accountabilities by 25 dismissed. Clearly, the charge against respondent of insubordination to the
November 1998. Petitioner issued its first notice on 24 November 1998, petitioners instructions for the surrender of his accountabilities was
even before respondent was obligated to return his accountabilities. Hence, unfounded since the respondent was still waiting for said instructions when
respondent could not yet have committed any offense when petitioner issued he was dismissed.
the first notice. Confused by petitioners arbitrary action, respondent did not
return his accountabilities, but immediately explained in a letter dated 26 Moreover, petitioner failed to observe procedural due process in
November 1998 his reasons for failing to return his accountabilities on 25 connection with the aforementioned charge. Section 2(d) of Rule 1 of The
November 1998 as previously ordered by the petitioner. Implementing Rules of Book VI states that:
For termination of employment based on just causes as
defined in Article 282 of the Labor Code:
During the company hearing held on 3 December 1998, respondent
(i) A written notice served on
offered to return his accountabilities in accordance with the instructions to be the employee specifying the
given by the petitioner. In a letter dated 9 December 1998 addressed to the ground or grounds for
termination, and giving said
petitioner, respondent reiterated his request for instructions on the return of employee reasonable
his accountabilities. There is no showing that petitioner replied to opportunity within which to
explain his side.
respondents letter. The letter written by petitioners District Supervisor
(ii) A hearing or conference
Raymond Bernardo to union representative Dominic Regoro sent through
during which the employee
electronic mail on 16 December 1998 still provided no definite instructions concerned, with the assistance
of counsel if he so desires is
to the respondent for the return of his accountabilities. This is the last given opportunity to respond
communication between the parties on the matter until petitioner wrongfully to the charge, present his
 evidence, or rebut the
was robbed of his rights to explain his side, to present his evidence and rebut
evidence presented against
him. what was presented against him, rights ensured by the proper observance of

(iii) A written notice of procedural due process.

termination served on the
employee, indicating that upon
due consideration of all the
circumstances, grounds have
been established to justify his
termination. (Emphases
supplied.)
From the aforecited provision, it is implicit that these requirements afford the
employee an opportunity to explain his side, respond to the charge, present
his or her evidence and rebut the evidence presented against him or her.
Of all the past offenses that were attributed to the respondent, he
contests having committed the infraction involving the unauthorized pull-
outs from customers, allegedly made in 1994. Again, the records show that
petitioner did not provide any proof to support said charge. It must be
emphasized at this point that the onus probandi to prove the lawfulness of the
dismissal rests with the employer,[39] and in light of petitioners failure to
discharge the same, the alleged offense cannot be given any credence by this
Court. As for the three remaining violations, it is unquestioned that
respondent had committed and had already been punished for them.

The superficial compliance with two notices and a hearing in this

While a penalty may no longer be imposed on offenses for which
case cannot be considered valid where these notices were issued and the
respondent has already been punished, these offenses, among other
hearing made before an offense was even committed. The first notice, issued
offenses, may still be used as justification for an employees
on 24 November 1998, was premature since respondent was obliged to return
dismissal. Hence, this Court must now take into consideration all the offenses
his accountabilities only on 25 November 1998. As respondents preventive
that respondent committed during his employment and decide whether these
suspension began on 25 November 1998, he was still performing his duties
infractions, taken together, constitute a valid cause for dismissal.
as territory representative the day before, which required the use of the
company car and other company equipment. During the administrative
Undoubtedly, respondent was negligent in reporting the number of
hearing on 3 December 1998, both parties clarified the confusion caused by
product samples in his custody for August and September 1998. He also
the petitioners premature notice and agreed that respondent would surrender
committed three other offenses in the past. First, he was found guilty of and
his accountabilities as soon as the petitioner gave its instructions. Since
penalized for granting unauthorized free goods in 1994. Secondly, he
petitioners ostensible compliance with the procedural requirements of notice
incurred delays in submitting his process reports for August, September and
and hearing took place before an offense was even committed, respondent
October 1998, for which charge he was punished with one-day
suspension. Lastly, he cheated in an ROL test in July 1998 for which he was
punished with another one-day suspension.
Respondents offense of granting unauthorized free goods was vaguely
discussed. Petitioner did not offer any evidence in this connection; it was
given credence only because of respondents admission of the same. What
acts constituted this offense and the circumstances surrounding it were not
explained. However, the records show that in the same year it was
committed, in 1994, petitioner still gave respondent two awards: membership
to the Wild Boar Society and the Five-Year Service Award.[40] Absent any
explanation which would give this offense substantial weight and
importance, it can only be presumed that petitioner did not consider the
offense as sufficiently momentous to disqualify respondent from receiving
an award or to even just issue the respondent a warning that a subsequent
offense would result in the termination of his employment.
The rest of the infractions imputed to the respondent were committed during
the time he was undergoing serious family problems. His inability to comply
with the deadlines for his process reports and his lack of care in accounting
for the product samples in his custody are understandably the result of his
preoccupation with very serious problems. Added to the pressure brought
about by the numerous charges he found himself facing, his errors and
negligence should be viewed in a more compassionate light.
Petitioners inability to keep up with his deadlines and his carelessness with
his report on product samples during a difficult time in his life are in no way
comparable to the transgressions in the cases cited by petitioner involving
other territory representatives Chua v. National Labor Relations
Commission[41] and Gustilo v. WyethPhilippines.[42] In the Chua case, it was
not a mere case of delay in the submission of reports and the occasional
mistakes in the DCR, but an established pattern of inattention in the
submission and accomplishing of his reports. The employee therein did not
even submit some of the DCRs, while other DCRs were belatedly submitted
in batches covering two to three months. Doctors call cards lacked either the
corresponding dates or the signatures of the doctors concerned. In
the Gustillocase, the employee falsified his application form, a gasoline
receipt, a report of his trade outlet calls, and misused his leaves. Evidently,
the employee in this case misappropriated company resources by making
claims for falsified expenses and making personal calls in lieu of trade outlet
calls. In this case, respondent had not defrauded the petitioner of its property.
The gravest charge that the respondent faced was cheating in his ROL
test. Although he avers that he formulated the answers himself and that he
merely allowed his co-employee Joedito Gasendo to write down his answers
for him, this Court finds this excuse to be very flimsy. The ROL test consists
of one page and two straightforward questions, which can be answered by
more or less ten sentences. Respondent could have spared the few minutes it
would take to write the examination. If he had lacked the time due to a family
emergency, a request for an extension would have been the more reasonable
and honest alternative.
 Despite the disapproving stance taken by this Court against
dishonesty, there have been instances when this Court found the ultimate
penalty of dismissal excessive, even for cases which bear the stigma of
deceit.
In Philippine Long Distance Telephone Company v. National Labor
Relations Commission,[43] an employee intervened in the anomalous
connection of four telephone lines. It was, likewise, established in Manila
Electric Company v. National Labor Relations Commission,[44] that the
employee was involved in the illegal installation of a power line. In both
cases, the violations were clearly prejudicial to the economic activity of his
employer. Finally, in National Labor Relations Commission
v. Salgarino,[45] a school teacher tampered with the grades of her students, an
act which was prejudicial to the schools reputation. Notably, the Court
stopped short of dismissing these employees for offenses more serious than
the present case.
In this case, the ROL test is a take-home examination intended to
check a territory representatives understanding of information already
contained in their Sales Career Manual, wherein the examinees are even
instructed to refer to their manuals. The improper taking of this test, while it
puts into question the examinees moral character, does not result in any
potential loss of property or damage to the reputation of the employer. Nor
does respondents previous performance show lack of knowledge required in
his sales career. Additionally, the dishonesty practiced by the employee did
not involve company property that was placed in his custody.Furthermore,
the gravity of this offense is substantially diminished by the fact that
petitioner itself had thought it unimportant enough to merit only a one-day
suspension. The respondents ten years of commendable performance cannot
be cancelled out by a single mistake made during a difficult period of his life,
a mistake that did not pose a potential danger to his employer.
The special circumstances of this case -- respondents family crises,
the duration of his employment, and the quality of his work during the
previous years -- must necessarily influence the penalty to be meted out to
the respondent. It would be a cruel disregard of the constitutional guarantee
of security of tenure to impose the penalty of dismissal, without giving due
consideration to the ill fortune that may befall a normally excellent employee.
In National Labor Relations Commission v. Salgarino,[46] special
consideration was given to the fact that the respondent therein had been in
the employ of the petitioners therein for 10 years and that she was a recipient
of numerous academic excellence awards and recognized by her students and
some of her peers in the profession as a competent teacher. The Court, in
other cases, has repeatedly ruled that in determining the penalty to be
imposed on an erring employee, his or her length of service must be taken
into account.[47] In Brew Master International, Inc., v. National Federation
of Labor Unions,[48] the emotional, psychological, spiritual and physical
stress and strain undergone by the employee during a family crisis were
regarded as special circumstances which precluded his dismissal from
service, despite his prolonged absence from work. The Court explains the
circumspection it exercises when faced with the imposition of the extremely
severe penalty of dismissal thus:
 The employers prerogative to discipline its employee must
be exercised without abuse of discretion. Its suspension of five months without pay, imposed by the Court of Appeals,
implementation should be tempered with compassion and would serve as a sufficient and just punishment for his violations of the
understanding.While an employer has the inherent right to
discipline its employees, we have always held that this companys Code of Conduct.
right must always be exercised humanely, and the penalty
it must impose should be commensurate to the offense
involved and to the degree of its infraction. The employer IN VIEW OF THE FOREGOING, the instant Petition
should bear in mind that, in the exercise of such right, what is DISMISSED and the assailed Decision of the Court of Appeals in CA-
is at stake is not the employees position but her livelihood
as well. The law regards the workers with G.R. SP No. 81983, promulgated on 8 February 2006, is AFFIRMED. Costs
compassion. Even where a worker has committed an
against the petitioner.
infraction, a penalty less punitive may suffice, whatever
missteps may be committed by labor ought not to be visited
with a consequence so severe. This is not only the laws
concern for workingman. There is, in addition, his or her
family to consider. Unemployment brings untold hardships
and sorrows upon those dependent on the wage-earner.[49] SO ORDERED.

Respondents violations of petitioners Code of Conduct, even if taken as a

whole, would not fall under the just causes of termination provided under
Article 282 of the Labor Code.[50] They are mere blunders, which may be
corrected. Petitioner failed to point out even a potential danger that
respondent would misappropriate or improperly dispose of company
property placed in his custody. It had not shown that during his employment,
respondent took a willfully defiant attitude against it. It also failed to show a
pattern of negligence which would indicate that respondent is incapable of
performing his responsibilities. At any other time during his employment,
respondent had shown himself a commendable worker.

Nonetheless, the infractions committed by the respondent, while

disproportionate to a penalty of dismissal, will not be overlooked. The
 SECOND DIVISION
[G.R. No. 158232. March 31, 2005]
FUJITSU COMPUTER PRODUCTS CORPORATION OF THE
PHILIPPINES and ERNESTO ESPINOSA, petitioners,
vs. THE HONORABLE COURT OF APPEALS, VICTOR DE
GUZMAN and ANTHONY P. ALVAREZ, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of the Rules of court
assailing the Decision[1] of the Court of Appeals in CA-G.R. SP No.
71324 reversing the decision of the National Labor Relations
Commission (NLRC) in NLRC NCR CA NO. 024541-00 dismissing
respondents Victor De Guzman and Anthony P. Alvarez from
employment, and the Resolution dated May 14, 2003 denying the
motion for reconsideration thereof.
The Facts of the Case
Petitioner Fujitsu Computer Products Corporation of the
Philippines (FCPP) is a corporation organized and existing under
Philippine laws with business address at the Special Export
Processing Zone, Carmelray, Canlubang, Calamba, Laguna. It is
engaged in the manufacture of hard disc drives, MR heads and other
computer storage devices for export.[2]
Respondent Victor de Guzman began working for FCPP on
September 21, 1997 as Facilities Section Manager. As of 1999, he
was also holding in a concurrent capacity the position of Coordinator
ISO 14000 Secretariat and was receiving a monthly salary of
P43,100.00[3]
Respondent Allan Alvarez, on the other hand, was employed as
a Senior Engineer on April 21, 1998. He was assigned at the Facilities
Department under the supervision of respondent De Guzman, and
was then earning P16,800.00.[4]
The garbage and scrap materials of FCPP were collected and
bought by the Saros Trucking Services and Enterprises (Saros). On
January 15, 1999, respondent De Guzman as Facilities Section
Manager, for and in behalf of FCPP, signed a Garbage Collection
Agreement[5] with Saros, and the latters signatory therein was its
owner and general manager, Larry Manaig.
Sometime in the third week of July 1999, petitioner Ernesto
Espinosa, HRD and General Affairs Director of FCPP, received a
disturbing report from Manaig. Manaig reported that respondent De
Guzman had caused the anomalous disposal of steel
[purlins][6] owned by FCPP.[7] Two of Manaigs employees, Roberto
Pumarez[8] and Ma. Theresa S. Felipe,[9] executed written statements
detailing how respondent De Guzman had ordered the steel purlins to
be brought out.
Thereafter, petitioner Espinosa sent a two-page Inter-Office
Memorandum dated July 24, 1999 to respondent De Guzman,
effectively placing him under preventive suspension. He was likewise
directed to submit his written explanation on the charges against him.
The Memorandum is worded as follows:
This refers to the report we have received from Mr. Larry Manaig,
owner of Saros Trucking Services, FCPPs garbage/scrap contractor.
It was disclosed to us that sometime in the first week of July 1999,
you personally approached Mr. Roberto Pumarez, Supervisor of
Saros, and intimated to him your interest in the scrap metals which
were taken from Building B which at present is undergoing
renovation. You allegedly told him that since Saros is paying FCPP
P2.50 per kilo of metal, you will buy it from Saros for P3.00 per kilo.
Thereafter, on July 10, 1999, Mr. Adrian Camcaman, one of your
staff in the Facilities Section, ordered Mr. [Pumarez] to send a truck
to pick up the scrap metals which you had earlier pointed to Mr.
[Pumarez]. These assorted metals were covered by Scrap/Garbage
Gate Pass Receipt No. 3413.
From these assorted metals, it was revealed to us that approximately
2,800 kgs. were delivered by Saros, per your instruction, to Sta.
Rosa Baptist Church. After this, on July 12, 1999, the remaining
scrap metals were again picked up by Saros. This time, the assorted
metals were covered by Scrap/Garbage Pass NO. 3419. From these
assorted [metals] 1,230 kgs. were purposely excluded from the gross
weight to be reported and paid to FCPP. Again, these excluded
metals were delivered to the same Baptist Church, per your
instruction. According to Mr. Manaig, despite several demands from
you, you have not yet remitted to him the payment for those assorted
scrap metals which you caused to be delivered to Sta. Rosa Baptist
Church.
In addition to the foregoing, it was likewise reported by Mr. Manaig
that there were previous occasions in the past where you solicited
from him empty drums, pails, and corrugated cartons, which were all
part of those picked up from FCPP. Attached hereto are the
statements given by the concerned employees of Saros.
Clearly, your above actions constitute qualified theft, grave abuse of
authority, and willful breach of trust and confidence.
In view of the foregoing, you are hereby directed to submit your
written explanation within forty-eight (48) hours from your receipt
hereof why no disciplinary sanction should be imposed against you,
including dismissal from the service. Should you fail to do so, as
hereby directed, we shall be compelled to assess and evaluate your
case based on available records. In the meantime, you are hereby
placed under preventive suspension effective immediately, pending
further investigation of your case.[10]
Thereafter, Cesar Picardal, the Security Manager of FCPP,
interviewed employees of SNK Philippines, Inc. (SNK), a building
contractor then working in the premises of FCPP. Rolando P.
Astillero,[11] Maurice Victoriano[12] and Nat Balayan[13] voluntarily
executed handwritten statements on the matter.
According to their respective accounts of what transpired on July
10, 1999, a 10-wheeler truck arrived at the company warehouse at
around 1:00 p.m. Assorted scrap materials were then hauled into the
truck, including steel purlins. Knowing that they could still be used as
braces for hepa-filter box hangers, SNK Mechanical Supervisor
Balayan asked his superior, Nobuaki Machidori, if the hauling could
be stopped, to which the latter consented. Balayan approached the
driver of the truck and told him not to include the steel purlins; the
warehouse helpers then began separating the steel purlins from the
other scrap materials to be hauled.
Astillero had also requested the men to stop the hauling. SNK
Engineer Victoriano had apparently told him that the steel purlins
would still be used for construction. At around 2:00 p.m., respondent
De Guzman called Victoriano and asked whether the scrap materials
at the Fuji Electric Warehouse could already be collected by the scrap
dealer. Victoriano assented, but requested that the existing c-purlins
be dismantled and that 20 lengths would be used as additional bracket
support for heap box/FCU installation.[14]
Adrian Camcaman, an employee of the Facilities Department
under respondent De Guzman, then arrived and informed Astillero that
Victoriano had already given permission for the hauling to
commence.[15] Camcaman also executed a written
statement[16] regarding the matter.
In his Explanation[17] dated July 26, 1999, respondent De
Guzman alleged the following in his defense:
Sometime in the first week of July 1999, I came to know from Rev.
Mario de Torres, Pastor of St. Rosa Bible Baptist Church that they
are in need of some steel [purlins] to be used by the church for its
roof deck construction. I told him that I know a scrap dealer where he
could possibly buy the said materials. I told him that Saros Trucking
Services is the regular buyer of FCPPs scrap materials and they can
buy from them. I referred the matter therefore to Mr. Roberto
[Pumarez], Supervisor of Saros and told him of the intension of the
Sta. Rosa Bible Baptist Church (SRBBC) to buy scrap metal. I further
told him that since Saros is paying FCPP P2.60 of scrap metal, Sta.
Rosa Bible Baptist Church can buy it from Saros at P3.00 per kilo a
price higher than FCPP. The statement of Mr. [Pumarez] which says
that I will buy it from Saros was not correct which I strongly object.
Acknowledging that Mr. [Pumarez] is amenable to sell the scrap to
Sta. Rosa Bible Baptist Church after consultation from his boss I
advised the Pastor of Sta. Rosa Bible Baptist Church that Saros
agreed. My part of the transaction ended there. Thereafter, as
reported by my staff the scrap metals were delivered to the church
by the Saros Trucking Services on July 10, 1999 covering the net
weight of 2,860 kilos based on the submitted weighing scale ticket
numbers 37830 and 37844 from ANGLO-WATSONS PHILS., INC.,
the weighing bridge company. These were covered by gate pass
number 3413. On July 12, 1999, it was reported that the remaining
scrap metals were again delivered to the Sta. Rosa Bible Baptist
Church covered by gate pass number 3419 but the exact weight
could not be determined yet pending the scale ticket submission. As
of July 24, 1999 the weight scale ticket of the last delivery was not
yet confirmed [or] submitted to FCPP.
It is not true that Mr. Larry Manaig demanded to me several times
the payment of the scrap because his secretary followed up to me
only once and I told her that the church is still awaiting for the actual
quantity and value of the metal scrap. When my staff Mr. Camcaman
returned from his two weeks nightshift duty and reported for dayshift
duty he submitted to me the scale ticket of the first delivery (see
Exhibit I). Please note that the scale ticket of the second delivery
was not yet submitted by Saros and only verbally communicated that
the weight delivered to the Sta. Rosa Bible Baptist Church is
approximately 1,230 kgs.[18]
Respondent De Guzman also pointed out that he could not be
charged for qualified theft since he merely issued gate passes to
Saros after the scrap metals were declared ready for disposal by SNK,
the company in charge thereof. The scrap metals in question were all
accounted fro and collected by Saros, and upon collection would be
considered sold to the latter. Respondent De Guzman theorized that
the latter initiated the complaint against him since he was now in
charge and had recently implemented measures to monitor and
confirm the actual weighing of all the scrap materials which had not
been done before. Saros had apparently been previously free to haul
all the scrap materials without field supervision from petitioner FCPP.
On July 28, 1999, respondent Alvarez sent an e-mail message to
his co-employees, expressing sympathy for the plight of respondent
De Guzman. Respondent Alvarez used a different computer, but the
event viewer system installed in the premises of petitioner FCPP was
able to trace the e-mail message to him. Thus, on even date, petitioner
Espinosa issued an Inter-Office Memorandum addressed to
respondent Alvarez, worded as follows:
TO : MR. ALLAN ALVAREZ
FROM : HRD and General Affairs Department
SUBJECT : SENDING OF E-MAIL MESSAGE
SYMPATHETIC
TO MR. DE GUZMAN
DATE : July 28, 1999
_______________________________________________
____________
This is in reference to the July 28, 1999 E-mail message
sent to all E-mail users from R. Sato this morning.
Upon investigation, records reveal that you used the
computer assigned to Shirley Bagnes and sent a message
hi to yourself. Moreover, the event viewer-system showed
that you logged at 7:19:58 (also using the computer of
Shirley Bagnes).
Please explain in writing within 48 hours why no disciplinary
action should be filed against you, including dismissal, for
grossly presenting information which [is] highly confidential
while an investigation on Mr. De Guzman is going on.
Moreover, your action of obtaining the sympathy of
employees through the use of the E-mail goes against your
role as a key person holding a highly responsible position in
the Facilities Section.
(Sgd.)
 ERNESTO G. ESPINOSA
HRD and General Affairs Director[19]
Respondent Alvarez submitted a written Explanation dated
September 29, 1999 where he apologized, readily admitted that he
was the sender of the e-mail message in question, and claimed that
he acted alone with his own conviction. He alleged, however, that he
was only expressing his sentiments, and that he was led by his desire
to help a friend in distress. He further explained:
Im not [meddling] with the case of our boss but as Facilities member,
we are sympathetic to the case against him. If the hearsay (sic) is
true, that he is [charged] on the ground of manipulating the scrap
management, then we totally disagree. It was said that he was
charged with qualified theft due to pull-out of metal scrap for his
church.
Our basis is pure hearsay but in all indication, we feel that the case
is going against our boss. It was frustrating for us to be kept on dark
side, helplessly waiting to defend him. We are afraid that one day,
the case is already closed and we even have not said what we have
to say. Sorry to have [caused] the e-mail just to be heard (I regret but
the damage has been done and could not do anything about it).
We [believe] that the action of the hauler is premeditated and hastily
done to pin down our boss. The transaction between the Hauler and
the Church has been transparent to us. Though the action has been
immediate due to request of hauler to get the metal scrap, verbal
agreement has been made. We had arranged hastily the hauling with
the consent of Construction Contractor and know about the request
of the Church. As agreed by the Church and [Hauler], the payment
will be P3.00/kg plus hauling fee. Hence, the Hauler will profit
P0.40/kg (already deducted their normal payment to our company of
P2.60/kg). However, for an obvious reason, the hauler had not
accepted the payment to make it look that he asked for the favor.
And as hearsay, the case filed against him is very strong with [pre-
arranged] evidence. We believe that the evidence has no merit at all.
In fact, the Hauler had to pay the company on its entirety as we had
recorded the full scale of scrap. It is the business and full
responsibility of Hauler to sell its [goods] or donate [them] for free.
The church has no liability to our company but only the Hauler who
have to settle all its account. The timing of these charges as we
believe could be attributed to the improved waste management of
our company. Beginning June, the hauler had to pay a bigger
amount for scrap (P0.25 million/month) against its previous billing of
P15,000/month. As ISO 14001 Promotion Secretariat, we are
mandated [to continuously improve] our Environmental Management
System. Aside from the direction of our President to cut cost, it is our
small way of helping on this objective.[20]
Respondent Alvarez was informed that his services were
terminated on the ground of serious misconduct effective August 13,
1999 through a Memorandum of even date, worded as follows:
After a careful evaluation of your case, it is our well discerned view,
as supported by competent and strong evidences, that you are guilty
of serious misconduct.
Ordinarily, while an innocent and responsible expression of concern
or opinion over the probable innocence or guilt of a co-employee,
who is under administrative investigation, may not be considered as
an infraction of company rules and regulations, the same
consideration does not obtain in your case.
The following environmental circumstances which surrounded your
E-mail message of concern over the preventive suspension upon Mr.
Victor de Guzman, your superior, and whose case is still undergoing
further impartial investigation, do not speak well of your true motive
behind the action you have taken.
Firstly, to hide your identity as the source of the E-mail message,
you intentionally used the computer of another employee, Shirley
Bagnes. But before you actually sent the E-mail message, you tried
to test the communication line between Shirley Bagnes computer
and your assigned computer by using Ms. Bagnes computer in
sending your computer the message hi. Fortunately, however, our
viewer-system was able to record you as the author of the E-mail
message.
To further compound the situation, you timed-in at 7:46 a.m. (which
you would later admit), in anticipation of a possible inquiry from the
management as to the source of the message, to show that it was
not possible for you to have sent the message just about the same
time because you just arrived. It was later confirmed, however, that
you were already using your computer as early as 7:21 a.m.
Moreover, we do not share your justification as contained in your
July 29, 1999 written explanation, where you also readily admitted
your culpability, that the reason why you were compelled to send an
E-mail message was simply to show your support to Mr. De
Guzman, who according to your premature and unsupported
conclusion is innocent of the charges lodged against him. Nobody
can say so at this point because the matter is still under
investigation. Your explanation is contrary to the fact that, with
malice and afterthought, you deliberately sent the E-mail message to
almost 150 Filipino and Japanese officers and employees, who are
almost entirely and officially not privy to the ongoing investigation.
Obviously, your foregoing actions at that time, as well as the tenor of
your E-mail message, were evidently and maliciously premeditated
to undermine the result of the ongoing administrative investigation
involving Mr. De Guzman, and therefore, constitute serious
misconduct. Moreover, your actions do not speak well of a ranking
Senior Engineer in the Facilities Section especially in consideration
of the fact that you have several employees reporting to you and
should in fact, serve as their role model.
In view of the foregoing ineluctable facts, you are hereby terminated
from the service, effective immediately. Please proceed to the
Finance and Accounting Department to clear yourself from any
accountability and to claim whatever unpaid salaries and benefits
which are still due you as of this date.
For your information and guidance.[21]
Respondent De Guzmans employment was thereafter terminated
effective August 23, 1999 through an Inter-Office Memorandum[22] of
even date.
The respondents then filed a complaint for illegal dismissal
against the petitioners with prayer for reinstatement, full backwages,
damages and attorneys fees before the NLRC, Regional Arbitration
Branch, Region IV. The case was docketed as NLRC Case No. RAB-
IV-9-11426-99-L. After the mandatory conciliation proceedings failed,
the parties were required to submit their respective position papers.
The Ruling of the Labor Arbiter
On April 17, 2000, Labor Arbiter Antonio R. Macam ruled in favor
of FCPP, stating that it was justified in terminating the employment of
the respondents. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the instant complaint is hereby
dismissed for lack of merit. Ernesto Espinosas counterclaim is
likewise dismissed under the same reason.
SO ORDERED.[23]
According to the Labor Arbiter, respondent De Guzman, a
managerial employee, was validly dismissed for loss of trust and
confidence. Citing a number of cases,[24] the Labor Arbiter stressed
that where an employee holds a position of trust and confidence, the
employer is given wider latitude of discretion in terminating his
services for just cause.
According to the Labor Arbiter, the systematic and calculated
manner by which respondent Alvarez sent e-mail messages to his co-
employees could not be disregarded. Thus, respondent Alvarezs
reliance on his freedom to express his opinion was misplaced, and to
condone such infraction would erode the discipline which FCPP, as
the employer, requires its employees to observe for orderly conduct in
the company premises.
The Labor Arbiter likewise ruled that as borne out by the records,
the respondents were not denied due process since they were
sufficiently accorded an opportunity to be heard.
 Unsatisfied, the respondents appealed the Labor Arbiters
decision to the NLRC.
The Ruling of the NLRC
The NLRC sustained the ruling of the Labor Arbiter and
dismissed the respondents appeal for lack of merit. According to the
Commission, the Labor Arbiters assessment an evaluation of the facts
of the case, as well as the evidence adduced by both parties, had been
quite thorough. Considering that the decision appealed from was
supported by substantial evidence, there was no reason to deviate
from the findings of the Labor Arbiter.
The NLRC also affirmed the Labor Arbiters finding that
respondent De Guzman, a managerial employee who was routinely
charged with custody and care of the petitioners property, was validly
dismissed on the ground of willful breach of trust and confidence.
Citing Caete v. NLRC,[25] the Commission pointed out that the right of
the employer to dismiss an employee on the ground of loss of
confidence or breach of trust has been recognized by no less than the
Supreme Court. Moreover, respondent De Guzman abused his
position as Facilities Manager of petitioner FCPP when he
prematurely declared the steel purlins as scrap materials. The
Commission also considered against respondent De Guzman his
belated [and] unsuccessful attempt to cover up his misdeeds.
In so far as the dismissal of respondent Alvarez was concerned,
the Commission held that the circumstances surrounding the sending
of the clearly malicious and premeditated e-mail message constituted
no less than serious misconduct. Hence, respondent Alvarezs
dismissal was also justified under the circumstances.
The NLRC also concluded that the respondents were not denied
due process, since they were adequately informed of the charges
against them and were required to explain thereon.
The respondents filed a motion for reconsideration of the said
decision, which the NLRC denied in a Resolution dated April 9, 2002.
The respondents then elevated their case to the Court of Appeals
(CA).
The Ruling of the CA
The CA reversed the ruling of the NLRC and held that the
respondents were illegally dismissed. According to the appellate court,
the non-payment of the scrap steel purlins by the Sta. Rosa Bible
Baptist Church (Sta. Rosa) to Saros was not a valid cause for the
dismissal of respondent De Guzman. Contrary to the findings of the
Labor Arbiter, respondent De Guzman did not betray the trust reposed
on him by his employer, as the transaction involving the sale of scrap
steel purlins was between Sta. Rosa and Saros. The CA further ruled
that the burden of proving just cause for termination of employment
rests on the employer, which in this case, petitioner FCPP was unable
to prove by substantial evidence. Considering that respondent De
Guzmans dismissal was not founded on clearly established facts
sufficient to warrant his separation from work, the petitioners act of
dismissing him primarily for the sale of scrap metal purlins was
unjustified.
Anent the dismissal of respondent Alvarez, the CA ruled that his
act of sympathizing and believing in the innocence of respondent De
Guzman and expressing his views was not of such grave character as
to be considered serious misconduct which warranted the penalty of
dismissal. The appellate court also stressed that in determining the
penalty to be imposed on an erring employee, due consideration must
be given to the length of service and the number of violations
committed during employment. According to the CA, the petitioners
failed to take these factors into consideration in dismissing respondent
Alvarez; hence, the latter was illegally dismissed. Thus, they were
entitled to reinstatement to their respective positions without loss of
seniority rights, full backwages, and other benefits corresponding to
the period from their illegal dismissal up to actual reinstatement. The
dispositive portion reads:
WHEREFORE, the petition is given due course; the assailed
decision of respondent NLRC affirming the Labor Arbiters judgment
is hereby REVERSED and SET ASIDE, and another one entered
ordering the reinstatement of petitioners to their respective positions,
without loss of seniority rights, and with full backwages.
SO ORDERED.[26]
The petitioners filed a motion for reconsideration of the said
decision, which the appellate court denied in a Resolution dated May
14, 2003.
Aggrieved, the petitioners now come to this Court, ascribing the
following errors committed by the CA:
I.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT TOTALLY IGNORED THE WELL
ENTRENCHED RULE BEING FOLLOWED IN THIS JURISDICTION
THAT FACTUAL FINDINGS OF THE NLRC AFFIRMING THOSE
OF THE LABOR ARBITER, WHEN SUFFICIENTLY SUPPORTED
BY EVIDENCE ON RECORD, ARE ACCORDED RESPECT AND
FINALITY BY THE APPELLATE COURT.
II.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT RULED THAT THE DISMISSAL OF
PRIVATE RESPONDENTS VICTOR DE GUZMAN AND ALLAN
ANTHONY ALVAREZ WERE ILLEGAL, CONTRARY TO THE
FINDINGS OF BOTH THE LABOR ARBITER AND NATIONAL
LABOR RELATIONS COMMISSION.
III.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT COMPLETELY DISREGARDED THE
FINDINGS OF BOTH THE LABOR ARBITER AND THE NATIONAL
LABOR RELATIONS COMMISSION THAT PRIVATE
RESPONDENT VICTOR DE GUZMAN HAD WILLFULLY
BREACHED THE TRUST AND CONFIDENCE REPOSED ON HIM
BY PETITIONERS WHEN HE PREMATURELY DECLARED THE
METAL [PURLINS] AS SCRAP MATERIALS.
IV.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT ACCEPTED HOOK [LINE] AND SINKER
THE CONTENTION OF RESPONDENT VICTOR DE GUZMAN
THAT THE TRANSACTION TO BUY THE STEEL [PURLINS] WAS
BETWEEN STA. ROSA BIBLE BAPTIST CHURCH AND SAROS
TRUCKING SERVICES.
V.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF
SUBSTANCE WHEN IT DID NOT GIVE PROBATIVE VALUE TO
THE UNCONTROVERTED TESTIMONIES OF THE WITNESSES
FOR THE PETITIONERS WHO ALL GAVE THE DETAILS AND
CIRCUMSTANCES ON HOW PRIVATE RESPONDENT VICTOR
DE GUZMAN ABUSED HIS POSITION AS FACILITIES MANAGER
AND ISO COORDINATOR.
VI.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT IGNORED THE HOST OF
JURISPRUDENTIAL TENETS CITED BY BOTH THE LABOR
ARBITER AND THE NATIONAL LABOR RELATIONS
[COMMISSION] SUPPORTING THE TERMINATION OF VICTOR
DE GUZMAN, A MANAGERIAL EMPLOYEE, FOR WILLFULL
BREACH OF TRUST AND CONFIDENCE.
VII.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF ITS
DISCRETION WHEN IT DISREGARDED THE FINDINGS OF BOTH
THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS
COMMISSION THAT PETITIONER ALLAN ANTHONY ALVAREZ
COMMITTED SERIOUS MISCONDUCT.[27]
According to the petitioners, the conclusions of the Labor Arbiter
should be respected, considering that he is in a better position to
assess and evaluate the evidence presented by the contending
parties. Thus, the CA, in ruling for the respondents, ignored a basic
jurisprudential precept. The petitioners add that since the respondents
themselves admitted their culpability, such principle should all the
more be applied strictly in this case.
The petitioners also point out that the appellate court ignored the
positive and incontrovertible testimonies of their witnesses, which
firmly established the culpability of respondent De Guzman in
prematurely declaring the steel purlins as scrap materials.
Furthermore, the SNK employees confirmed that the steel purlins
were still needed for the construction of a building; in fact, Astillero and
Balayan stated that they even prevented the employees of Saros from
loading them onto the truck. More damaging is the statement of
Victoriano, who narrated that it was only at around 2:00 p.m. of July
10, 1999 that he received a phone call from respondent De Guzman.
Contrary to the ruling of the appellate court, the witnesses for
respondent De Guzman, specifically the representative of Sta. Rosa,
failed to prove that they were the ones who personally transacted with
Saros. The petitioners stress that as the evidence would show, it was
through respondent De Guzman that the delivery of steel purlins to
Sta. Rosa was made possible. They reiterate that the respondent
wanted to buy the steel purlins, since it was his precise intention to
sell them to Sta. Rosa. The petitioners point out that as shown by his
application for employment, respondent De Guzman is an active
member of the said Church.
The petitioners also point out that respondent De Guzman is not
an ordinary rank-and-file employee; he was the Facilities Manager,
and concurrently, the Coordinator of the ISO 14000 Secretariat. As
such, respondent De Guzman had the sensitive and confidential duty
of managing the scrap disposal of petitioner FCPP, and his actuations
justified his dismissal based on willful breach of trust.
Anent the case of respondent Alvarez, the petitioners assert that
when he sent the e-mail message to more than 150 Filipino and
Japanese officers and employees, there was a willful and malicious
intent on his part to undermine the on-going investigation of his
superior, respondent De Guzman.
The petitioners conclude that the penalty imposed upon the
respondents is justified under the circumstances in the instant case.
In their comment, the respondents countered that as correctly
held by the appellate court, their dismissal from employment has no
valid and just cause. They stress that all the scrap metals were placed
in the premises of petitioner FCPP, and it was not respondent De
Guzman who had determined whether they could already be
considered ready for disposal, but Machidori of SNK. Moreover, it was
Saros which sold the scrap materials to Sta. Rosa, and respondent De
Guzman had no participation therein. The respondents point out that
the issue raised before the Court is factual in nature, and as such,
contrary to the Rules of Court.
The primary issue for resolution in the present case is whether
respondents De Guzman and Alvarez were illegally dismissed from
employment.
The Courts Ruling
The rule is that factual findings of quasi-judicial agencies such as
the NLRC are generally accorded not only respect, but at times, even
finality.[28] However, when it can be shown that administrative bodies
grossly misappreciated evidence of such nature as to compel a
contrary conclusion, the Court will not hesitate to reverse its factual
findings. Factual findings of administrative agencies are not infallible
and will be set aside if they fail the test of arbitrariness.[29] Thus, in this
case where the findings of the CA differ from those of the Labor Arbiter
and the NLRC, the Court, in the exercise of its equity jurisdiction, may
look into the records of the case and re-examine the questioned
findings. As a corollary, this Court is clothed with ample authority to
review matters, even if they are not assigned as errors in their appeal,
if it finds that their consideration is necessary to arrive at a just
decision of the case.[30]
It is settled that to constitute a valid dismissal from employment,
two requisites must concur: (a) the dismissal must be for any of the
causes provided for in Article 282[31] of the Labor Code; and (b) the
employee must be afforded an opportunity to be heard and defend
himself. This means that an employer can terminate the services of an
employee for just and valid causes, which must be supported by clear
and convincing evidence. It also means that, procedurally, the
employee must be given notice, with adequate opportunity to be
heard, before he is notified of his actual dismissal for cause.[32]
After a careful and painstaking study of the records of the case,
the Court rules that the respondents dismissal from employment was
not grounded on any of the just causes enumerated under Article 282
of the Labor Code.
The term trust and confidence is restricted to managerial
employees.[33] In this case, it is undisputed that respondent De
Guzman, as the Facilities Section Manager, occupied a position of
responsibility, a position imbued with trust and confidence. Among
others, it was his responsibility to see to it that the garbage and scrap
materials of petitioner FCPP were adequately managed and disposed
of. Thus, respondent De Guzman was entrusted with the duty of
handling or taking care of the property of his employer, i.e., the steel
purlins which the petitioners allege the respondent prematurely
declared as scrap materials.
However, to be valid ground for dismissal, loss of trust and
confidence must be based on a willful breach of trust and founded on
clearly established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly, heedlessly, or
inadvertently. It must rest on substantial grounds and not on the
employers arbitrariness, whims, caprices or suspicion; otherwise, the
employee would eternally remain at the mercy of the employer.[34]Loss
of confidence must not be indiscriminately used as a shield by the
employer against a claim that the dismissal of an employee was
arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee
concerned is unfit to continue working for the employer.[35]
The Court had the occasion to reiterate in Nokom v. National
Labor Relations Commission[36] the guidelines for the application of
the doctrine of loss of confidence-
a. loss of confidence should not be simulated;
b. it should not be used as a subterfuge for causes which
are improper, illegal or unjustified;
c. it may not be arbitrarily asserted in the face of
overwhelming evidence to the contrary; and
d. it must be genuine, not a mere afterthought to justify
earlier action taken in bad faith.[37]
In the case at bar, the grounds relied upon by petitioner FCPP in
terminating the employment of respondent De Guzman are contained
in the Inter-Office Memorandum dated August 23, 1999 which
effectively terminated the latters employment:
We have carefully evaluated your case and we are convinced that
you have committed grave abuse of authority amounting to serious
misconduct and willful breach of trust and confidence.
Based on our findings, as supported by strong and competent
evidences, and contrary to your explanation per your Letter dated
July 26, 1999, the following facts were satisfactorily established:
1. That sometime in the first week of July 1999, you intimated to Mr.
Roberto Pumarez, Supervisor of Saros Trucking Services, your
intention to buy from Saros the metals which were then piled up and
kept inside the Fuji Electric Philippines compound;
2. Thereafter, you ordered the metals to be sold to Saros Trucking
Services so that you can buy them (metals) later from Saros at the
price of P3.00 per kg., which price you yourself imposed on them;
3. However, it turned out later some pieces of metals which you have
earlier declared as scraps and ordered to be sold to Saros were still
to be used in the construction of FCPPs Building B. Thus, on July 10,
1999, while Saros employees were initially loading the metals, an
Engineer of SNK Philippines, Inc., FCPPs building contractor,
stopped them. It was only later after they were prevented from
further loading the metals that you checked with the SNK personnel
if the metals can already be disposed of as scraps which prove that
you have prematurely declared the metals as scrap;
4. That through Mr. [Adrian] Camcaman, your subordinate
Technician, you instructed the personnel of Saros to deliver the
metals to Sta. Rosa Baptist Church, where you are an active Church
member;
5. That, as of this date, you have not yet settled/paid your obligation
to Saros. That immediately after you were placed under preventive
suspension and to support your explanation that the transaction was
between Saros and Sta. Rosa Baptist Church, you caused, through
some people representing to be members of the Baptist Church and
who are unknown to Saros, to issue a check in favor of Saros. When
this failed, another person, representing to be a member of the
Baptist church and who appeared for the first time, went to the office
of Saros and tried to serve a letter addressed to Mr. Larry Manaig,
Saros Proprietor, allegedly inquiring about the total obligation of the
Baptist Church to Saros but, which was again not accepted as, in
truth and in fact, there was really no transaction between Saros and
the Sta. Rosa Baptist Church. All along, it was you and Mr.
Camcaman who dealt directly with Saros.
6. That in previous occasions, it was reported by Mr. Manaig that you
solicited from him empty drums, pails and corrugated cartons which
were all part of those scraps picked up from FCPP and you never
paid any of them, a fact which you never denied in your explanation
which is tantamount to admission.
Based on the foregoing, it is our well-discerned view that the
transaction was exclusively limited between you and Saros. Except
for your self-serving explanation, you failed miserably to present
direct evidence that it was the Sta. Rosa Baptist church which
bought the subject metals from Saros, as what you want us to
believe. At best, your explanation is a mere afterthought desperately
concocted to exculpate yourself.
As Facilities Manager, a very sensitive and confidential position, the
nature of your work demands of you that your actions should not be
tainted with any suspicion or impropriety. However, you failed in this
regard and abused your position to advance your self-interest.
In view of the foregoing, you are hereby terminated from the service,
retroactive July 24, 1999, the date you were placed under preventive
suspension. Please proceed to the Finance and Accounting
Department to clear yourself from any accountability and to claim
whatever unpaid salaries and benefits which are still due you as of
this date.
For your information and guidance.[38]
Based on the foregoing, the Court finds and so holds that indeed,
the petitioners reliance on the foregoing facts to justify the dismissal
of respondent De Guzman from employment is misplaced.
First. The scrap metals, including the steel purlins, were already
classified as scrap materials and ready for disposal. No less than the
written statements of the witnesses for the petitioners confirm this.
SNK Mechanical Supervisor Nat Balayan stated that the 10-wheeler
truck was about to load scrap irons, which includes c-[purlins].
Knowing that c-[purlins] could be used for braces of heap-filter box
hangers, I immediately informed Mr. Machidori if I would stop the
hauling, to which he consented. On the other hand, SNK Engineer
Maurice Victoriano stated that when respondent De Guzman called
him and inquired whether the scrap materials at the Fuji Electric
Warehouse Area could already be disposed of, he (Victoriano) replied
that everything was [okay] for disposal considering that this is [FCPPs]
scope. The report of Machidori is particularly revealing:
I went to Fuji Electric Warehouse last July 10 (rainy day) to check
[out] Warehouse situation. I noticed that scrap materials are being
carried out by a truck. I met Mr. Adrian Fujitsu Facilities Staff and
asked me that they will take out those scrap materials. SNK Staff
suggested using those scrap materials for BIF Hepa Box steel
supports. So I requested Mr. Adrian [Camcaman] to separate some
materials that we want to use and take out [the] others.
During our Construction meeting, Facilities explained that they
controlled scrap and unpacked materials for disposal. Earlier I
thought that taking out those materials are good for maintaining Fuji
Electric Warehouse Area. So I requested them to take out those
unrecycled materials.[39]
Thus, the Court agrees with the following ratiocination of the
appellate court when it denied the petitioners motion for
reconsideration of its decision:
[T]his Court would like to stress, as borne out by the pleadings
submitted by both parties, that the subject scrap metal [purlins] were
already in the scrap yard ready for hauling. It was the building
contractor and not petitioner Victor de Guzman who determined
whether the metals are scrap metals. Hence, the assertion of the
private respondents that petitioner Victor de Guzman prematurely
declared the metal [purlins] as scrap materials is without basis.[40]
In fine then, the materials at the said warehouse were already
considered scrap and ready for disposal. The hauling was stopped by
the SNK employees because their superiors felt that pieces of steel
purlins could still be used in the construction of a building in the
company premises. Thus, Victoriano and Balayan, with the conformity
of their superior Machidori, requested that some pieces be left behind
for the purpose.
Second. No fraud or bad faith could be attributed to respondent
De Guzman, as evinced by his readiness to disclose his participation
in the transaction between Saros and Sta. Rosa.
Third. Respondent De Guzman was never charged with qualified
theft as earlier alluded to by the petitioner FCPP in its Inter-Office
Memorandum dated August 28, 1999.
Fourth. The focal point of the cause of respondent De Guzmans
dismissal from employment is his alleged involvement in the purchase
of the steel purlins from petitioner FCPPs warehouse. Whether
respondent De Guzman was the buyer of the steel purlins or merely
facilitated the sale thereof to Sta. Rosa is of no moment. The fact is
that as per the Garbage Collection Agreement dated January 15,
1999, the scrap metals in the premises of petitioner FCPP were
regularly bought by Saros. Hence, after such scrap materials are
weighed, loaded onto a truck and carried out of the company
premises, the petitioner FCPP can no longer be considered the owner
thereof, and ceases to exercise control over such property.[41] Loss of
trust and confidence as a just cause for termination of employment is
premised on the fact that the employee concerned is invested with
delicate matters, such as the handling or care and protection of the
property and assets of the employer.[42] In this case however, Saros,
as the new owner of the scrap materials in question, including the steel
purlins, was free to contract with anyone as it wished. At most,
respondent De Guzman was merely recommending a buyer for such
scrap materials, an act which could hardly be considered as deserving
of such a harsh penalty as dismissal from employment.
What strikes the Court as odd in this case is that petitioner FCPP
willingly believed the testimony of third persons, non-employees,
rather than the account of its own employee. There has been no
allegation that respondent De Guzman had been previously found
guilty of any misconduct or had violated established company rules.
Moreover, it is difficult to believe that respondent De Guzman would
jeopardize his job for something as measly as steel purlins.[43]
The Court thus concludes that respondent De Guzmans
actuations do not amount to willful breach of trust and confidence. It
bears stressing that in termination cases, the employer bears
the onus of proving that the dismissal was for just cause.[44] Indeed, a
condemnation of dishonesty and disloyalty cannot arise from
suspicions spawned by speculative inferences.[45] Because of its
subjective nature, this Court has been very scrutinizing in cases of
dismissal based on loss of trust and confidence because the same
can easily be concocted by an abusive employer. Thus, when the
breach of trust or loss of confidence theorized upon is not borne by
clearly established facts, as in this case, such dismissal on the ground
of loss of confidence cannot be allowed.[46] Moreover, the fact that one
is a managerial employee does not by itself exclude him from the
protection of the constitutional guarantee of security of tenure.[47]
The Court likewise rules that the dismissal of respondent Alvarez
from employment for gross misconduct was illegal.
The Court has had varied rulings in cases involving gross
misconduct as a ground for dismissal, depending on the
circumstances of each case. In Zenco Sales, Inc. v. National Labor
Relations Commission,[48] the Court affirmed the NLRC and the Labor
Arbiter in finding the dismissed employee guilty of misfeasance for his
failure to closely monitor and control the sales transactions of
salesman Chua and malfeasance because he used the respondent
corporations properties, equipment and personnel in connection with
his personal business of buy and sale of used sacks. The Court ruled
that when brought within the ambit of Article 282 of the Labor Code, it
constitutes gross neglect in the performance of duty and serious
misconduct resulting to loss of trust and confidence.[49] In Philippine
National Construction Corporation v. NLRC,[50] the dismissed
employees were caught in the act of accepting a bribe in the form of
cash and a dog from a motorist who was suspected of illegally
transporting dogs. The Court held that by yielding to bribery, the said
employees violated their very duty to maintain peace and order in the
North Luzon Expressway, and to ensure that all tollway rules and
regulations were followed. Such act was classified as serious
misconduct which warranted the penalty of dismissal from
employment.[51] In another case,[52] the Court considered a dismissed
faculty members act of exerting influence and pressure to change a
failing grade to a passing one and the misrepresentation that a student
was his nephew as serious misconduct, and a valid ground for
dismissal.
However, in the old case of Radio Communications of the
Philippines, Inc. v. NLRC,[53] the Court considered the dismissed
employees act of hurling invectives at a co-employee as a minor
offense. The Court therein ruled that the termination of an employee
on account of a minor misconduct is illegal because Article 282 of the
Labor Code mentions serious Misconduct as a cause for cessation of
employment.[54]
Misconduct has been defined as improper or wrong conduct. It is
the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error of judgment.[55] The misconduct to
be serious must be of such grave and aggravated character and not
merely trivial and unimportant. Such misconduct, however
serious, must nevertheless be in connection with the employees work
to constitute just cause for his separation[56].Thus, for misconduct or
improper behavior to be a just cause for dismissal, (a) it must be
serious; (b) must relate to the performance of the employees duties;
and (c) must show that the employee has become unfit to continue
working for the employer.[57] Indeed, an employer may not be
compelled to continue to employ such person whose continuance in
the service would be patently inimical to his employers interest. [58]
In this case, the Court finds that respondent Alvarezs act of
sending an e-mail message as an expression of sympathy for the
plight of a superior can hardly be characterized as serious misconduct
as to merit the penalty of dismissal. This can be gleaned from a
perusal of the e-mail message itself, to wit:
Question: Where is Mr. De Guzman, Facilities Manager?
Answer: He was framed-up by Saros Trucking (FCPP
garbage hauler) and [accused] of manipulating scrap metal
which is not true since the church buyer and Saros agreed
for a fee of P3.00/kg. [where] Saro will profit P0.40/kg plus
hauling fee.
Question: WHY?
Answer: Mr. De Guzman was able to improve the waste
management wherein Saro have to pay close to P0.25
million pesos for June scrap alone against Saros previous
collection of around P15,000/month only.
THE PLOT IS OBVIOUS BUT IS IT JUST TO SUSPEND A
GOOD MAN LIKE MR. DE GUZMAN THAN A GARBAGE
HAULER WHO DEVILISHLY [PROFITED] FROM FCPP
WITHOUT SWEAT? PLS. HELP US[59]
There is no showing that the sending of such e-mail message had
any bearing or relation on respondent Alvarezs competence and
proficiency in his job. To reiterate, in order to consider it a serious
misconduct that would justify dismissal under the law, the act must
have been done in relation to the performance of his duties as would
show him to be unfit to continue working for his
employer.[60] Moreover, while allegations of a frame-up were made
against Saros, the e-mail message does not contain a single malicious
imputation or charge against petitioner FCPP, or petitioner Espinosa.
Instructive on this point is the discussion of the Court in Samson v.
National Labor Relations Commission,[61] viz.:
The instant case should be distinguished from the previous cases
where we held that the use of insulting and offensive language
constituted gross misconduct justifying an employees dismissal.
In De la Cruz v. NLRC (177 SCRA 626 [1989]), the dismissed
employee shouted sayang and pagka-professional mo! and putang
ina mo at the company physician when the latter refused to give him
a referral slip. In Autobus Workers Union (AWU) v. NLRC (291
SCRA 219 [1998]), the dismissed employee called his
supervisor gago ka and taunted the latter by saying bakit, anong
gusto mo, tang ina mo. In these cases, the dismissed employees
personally subjected their respective superiors to the foregoing
verbal abuses. The utter lack of respect for their superiors was
patent. In contrast, when petitioner was heard to have uttered the
alleged offensive words against respondent companys president and
general manager, the latter was not around.
In Asian Design and Manufacturing Corporation v. Deputy Minister of
Labor (142 SCRA 79 [1986]), the dismissed employee made false
and malicious statements against the foreman (his superior) by
telling his co-employees: If you dont give a goat to the foreman you
will be terminated. If you want to remain in this company, you have to
give a goat. The dismissed employee therein likewise posted a
notice in the comfort room of the company premises which read:
Notice to all Sander Those who want to remain in this company, you
must give anything to your foreman. Failure to do so will be
terminated Alice 80. In Reynolds Philippine Corporation v.
Eslava (137 SCRA 259 [1985]), the dismissed employee circulated
several letters to the members of the companys board of directors
calling the executive vice-president and general manager a big fool,
anti-Filipino and accusing him of mismanagement, inefficiency, lack
of planning and foresight, petty favoritism, dictatorial policies, one-
man rule, contemptuous attitude to labor, anti-Filipino utterances and
activities. In this case, the records do not show that petitioner made
any such false and malicious statements against any of his
superiors.[62]
In fine, the petitioners failed to show that the respondents acts
were sufficient to warrant their dismissal from employment, for loss of
trust and confidence on one hand for respondent De Guzman, and for
gross misconduct as against respondent Alvarez on the other. To
reiterate, it has not been shown that the respondents had been
previously found guilty of any infraction of company rules and
regulations during the period of their employment.
Under Article 279 of the Labor Code, and employee who is
unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges, and to the payment of his
full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent, computed from the time his compensation
was withheld from him (which, as a rule, is from the time of his illegal
dismissal) up to the time of his actual reinstatement. [63] These
remedies give life to the workers constitutional right to security of
tenure.[64]
The Court is wont to reiterate that while an employer has its own
interest to protect, and pursuant thereto, it may terminate a managerial
employee for a just cause, such prerogative to dismiss or lay-off an
employee must be exercised without abuse of discretion. Its
implementation should be tempered with compassion and
understanding. The employer should bear in mind that, in the
execution of the said prerogative, what is at stake is not only the
employees position, but his very livelihood.[65] The Constitution does
not condone wrongdoing by the employee; nevertheless, it urges a
moderation of the sanction that may be applied to him.[66] Where a
penalty less punitive would suffice, whatever missteps may have been
committed by the worker ought not be visited with a consequence so
severe as dismissal from employment.[67] Indeed, the consistent rule
is that if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the
latter. The employer must affirmatively show rationally adequate
evidence that the dismissal was for justifiable cause.[68]
WHEREFORE, the instant petition is DENIED. The assailed
Decision of the Court of Appeals in CA-G.R. SP No. 71324 and the
Resolution dated May 14, 2003 are AFFIRMED. Costs against the
petitioners.
SO ORDERED.
 Republic of the Philippines What we want to have is a similar activity here in the office. So
SUPREME COURT we invite you to participate in this effort. You can also dress your
Manila kids up in funny costumes. Also the kids will then go around the
office Trick or Treating. So, we ask you to prepare your Treats,
SECOND DIVISION like candies, biscuits, cookies, etc., (Cash is also welcome for
parents like me . . . he he he)
G.R. Nos. 170384-85 March 9, 2007
Why are we doing this? Well, we just want the kids to have a
LORNA DISING PUNZAL, Petitioner, good time. Kung gusto ninyo, mag-costume din kayo.
vs.
ETSI TECHNOLOGIES, INC., WERNER GEISERT, and Alright! See you tomorrow morning, [October 31,
CARMELO D. REMUDARO, Respondents. 2001].1 (Underscoring supplied)

DECISION Petitioner’s immediate superior, respondent Carmelo Remudaro

CARPIO MORALES, J.:
Petitioner, Lorna Dising Punzal, had been working for
respondent, ETSI Technologies, Inc. (ETSI), for 12 years prior to
the termination of her services on November 26, 2001 on which
date she was holding the position of Department Secretary.
On October 30, 2001, petitioner sent an electronic mail (e-mail)
message to her officemates announcing the holding of a
Halloween party that was to be held in the office the following
day. The e-mail message read verbatim:
Dear ETSI-JMT Colleagues,
Good day!
As you all know, tomorrow is the day before HALLOWEEN. And
many of our kids will go around "TRICK OR TREATING". We will
be dressing them up in costumes of all sorts, from cute to
outrageous, from wild to "scary."
(Remudaro), who was one of those to whom the e-mail message
was sent, advised petitioner to first secure the approval of the
Senior Vice President, respondent Werner Geisert (Geisert), for
the holding of the party in the office.
Petitioner soon learned that Geisert did not approve of the plan to
hold a party in the office. She thereupon sent also on October 30,
2001 another e-mail message to her officemates, reading
verbatim:
Sorry for the mail that I sent you, unfortunately the SVP of ETSI
Technologies, Inc. did not agree to our idea to bring our children
in the office for the TRICK or TREATING. He was so unfair…para
bang palagi siyang iniisahan sa trabaho…bakit most of the
parents na mag-joined ang anak ay naka-VL naman.
Anyway, solohin na lang niya bukas ang office.
Anyway, to those parents who would like to bring their Kids in
Megamall there will be Trick or Treating at Mc Donalds Megamall
Bldg. A at 10:00 AM tomorrow and let’s not spoil the fun for our
kids.2 (Underscoring supplied)
Remudaro and Arnold Z. David (David), the Assistant Vice
President of Human Resources/TQM of ETSI, later informed
petitioner, by letter of November 13, 2001, that Geisert got a copy
of her e-mail message and that he required her to explain in
writing within 48 hours why she
. . . should not be given disciplinary action for committing Article
IV, No. 5 & 8 Improper conduct or acts of discourtesy or
disrespect and Making malicious statements concerning
Company Officer, whereby such offenses may be subject to
suspension to termination depending upon the gravity of the
offense/s as specified in our ETSI’s Code of Conduct and
Discipline.3 (Emphasis in the original)
Petitioner replied by letter of November 14, 2001 that she had no
malicious intention in sending the second e-mail message and
that she "never expected such kind of words can be called as
‘acts of discourtesy or disrespect.’" 4
On November 19, 2001, Geisert and Remudaro conferred with
petitioner to give her a chance to explain her side.5
David and Remudaro subsequently sent petitioner a letter on
November 26, 2001, finding her explanation "not acceptable" and
terminating her services, effective immediately, "for committing
Article IV, No[s]. 5 & 8, Improper conduct or act of discourtesy or
disrespect and making malicious statements concerning company
officer."6
On February 11, 2002, petitioner filed before the National Labor
Relations Commission (NLRC) a complaint7 for illegal dismissal
against ETSI, Geisert, and Remudaro.
By Order of November 26, 2002, the Labor Arbiter dismissed
petitioner’s complaint, finding that she was legally dismissed for
serious misconduct, and that she was afforded due process.8
On petitioner’s appeal, the NLRC, by Resolution9 dated October
27, 2003, found that while she was indeed guilty of misconduct,
the penalty of dismissal was disproportionate to her
infraction.10 The NLRC thus ordered that petitioner was entitled to
reinstatement which, however, was no longer feasible due to
strained relations. The NLRC thus ordered that petitioner be
awarded separation pay equivalent to one month pay for every
year of service, a period of at least six months to be considered
one whole year.11
Noting that petitioner was not entirely faultless, the NLRC denied
her prayer for backwages12 as well as her prayer for exemplary
and moral damages and attorney’s fees in the absence of the
legal conditions justifying their award.13
Both parties filed their respective motions for
reconsideration14 which the NLRC denied.15 Both parties
thereupon filed their respective petitions for certiorari16 with the
Court of Appeals.
In the petition of petitioner, docketed as CA-G.R. SP No. 83296,
she questioned the denial of her prayer for backwages.17 Upon
the other hand, in the petition of respondent ETSI, et al.,
docketed as CA-G.R. SP No. 83205, they questioned the finding
of illegal dismissal, the grant of separation pay, and the
imputation of liability to Geisert and Remudaro.18
In her comment to the petition of ETSI, et al. in CA-G.R. SP No.
83205, petitioner raised the issue of due process, alleging that
her employer did not inform her of her right to be assisted by
counsel during the conference with respondents Geisert and
Remudaro.19
By Decision20 of May 13, 2005, the Court of Appeals, which
priorly consolidated the petitions of both parties, held that
petitioner’s dismissal was in order:21
The gravity of Punzal’s infraction is borne by the fact that her e-
mail message to the workers of ETSI tended to cast scorn and
disrespect toward a senior vice president of the company. The
message itself resounds of subversion and undermines the
authority and credibility of management.
xxxx
Also, this message was not a mere expression of
dissatisfaction privately made by one person to another, but was
circulated to everyone in the work area. The message was sent
close at the heels of SVP Geisert’s disapproval of Punzal’s plan
to hold a Halloween affair in the office, because the said event
would disrupt the operations and peace and order in the office.
Punzal therefore displayed a tendency to act without
management’s approval, and even against management’s will, as
she invited her co-workers to join a trick or treating activity at
another venue during office hours.
The message also comes across as an encouragement to ignore
SVP Geisert’s authority, and portrayed him as unworthy of
respect because of his unpopular personality.
This is in clear violation of Article IV, Section 5 of the company’s
Code of Conduct and Discipline, which clearly imposes the
penalty of "suspension to dismissal, depending upon the gravity
of the offense" in cases where an employee displays "improper
conduct or acts of discourtesy or disrespect to fellow employees,
visitors, guests, clients, at any time."
The imposition of the penalty of dismissal is proper, because of
the gravity of Punzal’s misconduct, as earlier pointed out, and
considering that:
(1) Punzal’s statements were discourteous and
disrespectful not only to a mere co-employee, but to a
high ranking executive official of the company;
(2) Punzal’s statements tended to ridicule and undermine
the credibility and authority of SVP Geisert, and even
encouraged disobedience to the said officer;
(3) Punzal’s message was sent to a great number of
employees of ETSI, which tended to sow dissent and
disrespect to management among a great number of
employees of ETSI;
(4) Punzal’s message could not have been made in good
faith, because the message itself used language that
placed SVP Geisert in ridicule and portrayed him as an
object of scorn, betraying the sender’s bad faith.
Given these circumstances, the fact that Punzal’s infraction
occurred only once should be largely insignificant. The gravity
and publicity of the offense as well as its adverse impact in the
workplace is more than sufficient to place the same in the level of
a serious misconduct.22 (Underscoring supplied)
Contrary to petitioner’s contention, the Court of Appeals also
found that due process was observed in her dismissal.23
The Court of Appeals thus reinstated the Labor Arbiter’s Order.
Thus it disposed:
WHEREFORE, premises considered, the petition filed by Lorna
Dising Punzal in CA-G.R. SP No. 83296 is hereby DISMISSED,
while the petition filed by ETSI, Werner Geisert and Carmelo D.
Remudaro is hereby GRANTED. The assailed Resolutions, dated
October 27, 2003 and January 28, 2004, of the respondent
National Labor Relations Commission are hereby SET ASIDE. In
lieu thereof, the Decision of Labor Arbiter Joel S. Lustria, dated
November 26, 2002, dismissing the complaint filed by Lorna
Dising Punzal is hereby REINSTATED.
SO ORDERED.24 (Underscoring supplied)
Hence, petitioner’s present Petition for Review on
Certiorari,25 faulting the appellate court to have erred
. . . WHEN IT RULED THAT PETITIONER’S
STATEMENT WAS DISCOURTEOUS AND
DISRESPECTFUL CONSTITUTING GROSS
DISRESPECT AND SERIOUS MISCONDUCT;
. . . WHEN IT FOUND THAT DUE PROCESS WAS
ACCORDED THE PETITIONER;
. . . WHEN IT FAILED TO AWARD THE PETITIONER
HER RIGHT TO REINSTATEMENT AND
BACKWAGES.26
Petitioner posits that her second e-mail message was merely an
exercise of her right to freedom of expression without any malice
on her part.27
On the other hand, ETSI, et al. maintain that petitioner’s second
e-mail message was tainted with bad faith and constituted a
grave violation of the company’s code of discipline.28
In Philippines Today, Inc. v. NLRC,29 this Court, passing on the
attitude or respect that an employee is expected to observe
towards an employer, held:
Alegre’s choice of words and way of expression betray his
allegation that the memorandum was simply an "opportunity to
open the eyes of (Petitioner) Belmonte to the work environment in
petitioner’s newspaper with the end in view of persuading (her) to
take a hand at improving said environment." Apprising his
employer (or top-level management) of his frustrations in his job
and differences with his immediate superior is certainly not done
in an abrasive, offensive, and disrespectful manner. A cordial or,
at the very least, civil attitude, according due deference to one’s
superiors, is still observed, especially among high-ranking
management officers. The Court takes judicial notice of the
Filipino values of pakikisama and paggalang which are not only
prevalent among members of a family and community but within
organizations as well, including work sites. An employee is
expected to extend due respect to management, the employer
being the "proverbial hen that lays the golden egg," so to speak.
An aggrieved employee who wants to unburden himself of his
disappointments and frustrations in his job or relations with his
immediate superior would normally approach said superior
directly or otherwise ask some other officer possibly to mediate
and discuss the problem with the end in view of settling their
differences without causing ferocious conflicts. No matter how
[much] the employee dislikes the employer professionally, and
even if he is in a confrontational disposition, he cannot afford to
be disrespectful and dare to talk with an unguarded tongue and/or
with a bileful pen.30 (Underscoring supplied)
A scrutiny of petitioner’s second e-mail message shows that her
remarks were not merely an expression of her opinion about
Geisert’s decision; they were directed against Geisert himself, viz:
"He was so unfair . . . para bang palagi siyang iniisahan sa
trabaho. . . Anyway, solohin na lang niya bukas ang office."
(Emphasis supplied)31
As the Court of Appeals noted, petitioner, in her closing statement
– "Anyway, to those parents who would like to bring their Kids in
Megamall there will be Trick or Treating at Mc Donalds x x x
tomorrow and let’s not spoil the fun for our kids"32 – even invited
her co-workers to join a trick or treating activity at another
venue during office hours33(10:00 AM), October 31, 2001 being a
Wednesday and there is no showing that it was declared a
holiday, encouraging them to ignore Geisert’s authority.
Additionally, petitioner sent the e-mail message in reaction to
Geisert’s decision which he had all the right to make. That it has
been a tradition in ETSI to celebrate occasions such as
Christmas, birthdays, Halloween, and others34does not remove
Geisert’s prerogative to approve or disapprove plans to hold such
celebrations in office premises and during company time. It is
settled that
x x x it is the prerogative of management to regulate, according to
its discretion and judgment, all aspects of employment. This flows
from the established rule that labor law does not authorize the
substitution of the judgment of the employer in the conduct of its
business. Such management prerogative may be availed of
without fear of any liability so long as it is exercised in good faith
for the advancement of the employers’ interest and not for the
purpose of defeating or circumventing the rights of employees
under special laws or valid agreement and are not exercised in a
malicious, harsh, oppressive, vindictive or wanton manner or out
of malice or spite.35 (Underscoring supplied)
In the case at bar, the disapproval of the plan to hold the
Halloween party on October 31, 2001 may not be considered to
have been actuated by bad faith. As the Labor Arbiter noted:
It may not be ignored that holding a trick or treat party in the
office premises of respondent ETSI would certainly affect the
operations of the office, since children will be freely roaming
around the office premises, things may get misplaced and the
noise in the office will simply be too hard to ignore. Contrary to
complainant’s position, it is immaterial if the parents of the
children who will participate in the trick or treat will be on vacation
leave, since it is the work of the employees who will not be on
leave and who will be working on that day which will be disrupted,
possibly resulting in the disruption of the operations of the
company.36 (Underscoring supplied)
Given the reasonableness of Geisert’s decision that provoked
petitioner to send the second e-mail message, the observations
of the Court of Appeals that "the message x x x resounds of
subversion and undermines the authority and credibility of
management"37 and that petitioner "displayed a tendency to act
without management’s approval, and even against management’s
will" are well taken.38
Moreover, in circulating the second e-mail message, petitioner
violated Articles III (8) and IV (5) of ETSI’s Code of Conduct on
"making false or malicious statements concerning the Company,
its officers and employees or its products and services"39 and
"improper conduct or acts of discourtesy or disrespect to fellow
employees, visitors, guests, clients, at any time."40
Petitioner invokes Samson v. National Labor Relations
Commission41 where this Court held that the dismissal of the
therein petitioner was too harsh a penalty for uttering "Si
EDT [Epitacio D. Titong, the General Manager and President of
the employer], bullshit yan," "sabihin mo kay EDT yan" and
"sabihin mo kay EDT, bullshit yan," while making the "dirty finger"
gesture, and warning that the forthcoming national sales
conference of the company would be a "very bloody one."
Petitioner’s reliance on Samson is misplaced. First, in that case,
this Court found that the misconduct committed was not related
with the employee’s work as the offensive remarks were verbally
made during an informal Christmas gathering of the employees,
an occasion "where tongues are more often than not loosened by
liquor or other alcoholic beverages"42 and "it is to be expected x x
x that employees freely express their grievances and gripes
against their employers."43
In petitioner’s case, her assailed conduct was related to her work.
It reflects an unwillingness to comply with reasonable
management directives.
While in Samson, Samson was held to be merely expressing his
dissatisfaction over a management decision,44 in this case, as
earlier shown, petitioner’s offensive remarks were directed
against Geisert.
Additionally, in Samson, this Court found that unlike in Autobus
Workers’ Union (AWU) v. NLRC45 where dismissal was held to be
an appropriate penalty for uttering insulting remarks to the
supervisor,46 Samson uttered the insulting words against EDT in
the latter’s absence.47 In the case at bar, while petitioner did not
address her e-mail message to Geisert, she circulated it knowing
– or at least, with reason to know – that it would reach him. As
ETSI notes, "[t]hat [petitioner] circulated this e-mail message with
the knowledge that it would reach the eyes of management may
be reasonably concluded given that the first e-mail message
reached her immediate supervisor’s attention."48
Finally, in Samson, this Court found that the "lack of urgency on
the part of the respondent company in taking any disciplinary
action against [the employee] negates its charge that the latter’s
misbehavior constituted serious misconduct."49 In the case at bar,
the management acted 14 days after petitioner circulated the
quoted e-mail message.50
Petitioner asks that her 12 years of service to ETSI during which,
so she claims, she committed no other offense be taken as a
mitigating circumstance.51 This Court has held, however, that "the
longer an employee stays in the service of the company, the
greater is his responsibility for knowledge and compliance with
the norms of conduct and the code of discipline in the
company."52
In fine, petitioner, having been dismissed for just cause, is neither
entitled to reinstatement nor to backwages.
Petitioner’s contention that she was denied due process is well-
taken however, as the records do not show that she was informed
of her right to be represented by counsel during the conference
with Geisert and Remudaro.
The protestations of ETSI, et al. that the right to be informed of
the right to counsel does not apply to investigations before
administrative bodies and that law and jurisprudence merely give
the employee the option to secure the services of counsel in a
hearing or conference53 fall in light of the clear provision of Article
277 (b) of the Labor Code that
the employer xxx shall afford [the worker whose employment is
sought to be terminated] ample opportunity to be heard and to
defend himself with the assistance of his representatives if he so
desires in accordance with company rules and regulations
pursuant to guidelines set by the Department of Labor and
Employment,
and this Court’s explicit pronouncement that "[a]mple opportunity
connotes every kind of assistance that management must accord
the employee to enable him to prepare adequately for his defense
including legal representation."54
Following Agabon, et al. v. National Labor Relations
Commission,55 the violation of petitioner’s statutory due process
right entitles her to an award of nominal damage, which this Court
fixes at ₱30,000.56
WHEREFORE, the petition is in part GRANTED. The questioned
decision is AFFIRMED with the MODIFICATIONthat respondent
ETSI Technologies, Inc. is ordered to pay petitioner, Lorna
Punzal, nominal damages in the amount of ₱30,000.
SO ORDERED.
 SECOND DIVISION Resolution[2] dated June 23, 2005 of the Court of Appeals in CA-G.R.
MICHAEL J. LAGROSAS, G.R. No. 168637 SP No. 83885. The second petition, docketed as G.R. No. 170684,
Petitioner, filed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil., assails
the Resolutions[3] dated August 12, 2005 and October 28, 2005 of the
Court of Appeals in CA-G.R. SP No. 83885.
- versus - Present:

QUISUMBING, J., Chairperson, The facts are undisputed.

BRISTOL-MYERS SQUIBB (PHIL.), INC./MEAD CARPIO MORALES,
JOHNSON PHIL., RICHARD SMYTH as General TINGA,
Manager and FERDIE SARFATI, as Medical Sales VELASCO, JR., and Michael J. Lagrosas was employed by Bristol-Myers Squibb
Director, BRION, JJ.
Respondents. (Phil.), Inc./Mead Johnson Phil. from January 6, 1997 until March 23,
x- - - - - - - - - - - - - - - - - - - - - - - - - -x 2000 as Territory Manager in its Medical Sales Force Division.[4]

BRISTOL-MYERS SQUIBB (PHIL.), G.R. No. 170684 On February 4, 2000, Ma. Dulcinea S. Lim, also a Territory
INC./MEAD JOHNSON PHIL., Manager and Lagrosas former girlfriend, attended a district meeting of
Petitioner, territory managers at McDonalds Alabang Town Center. After the
meeting, she dined out with her friends. She left her car at McDonalds
- versus - and rode with Cesar R. Menquito, Jr. When they returned to
McDonalds, Lim saw Lagrosas car parked beside her car. Lim told
COURT OF APPEALS and MICHAEL J. Promulgated: Menquito not to stop his car but Lagrosas followed them and slammed
LAGROSAS, Menquitos car thrice. Menquito and Lim alighted from the
Respondents. September 12, 2008 car. Lagrosas approached them and hit Menquito with a metal
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
steering wheel lock. When Lim tried to intervene, Lagrosas
- -x
accidentally hit her head.

DECISION
Upon learning of the incident, Bristol-Myers required Lagrosas
QUISUMBING, J.: to explain in writing why he should not be dismissed for assaulting a
co-employee outside of business hours. While the offense is not
Before this Court are two consolidated petitions. The first covered by the Code of Discipline for Territory Managers, the Code
petition, docketed as G.R. No. 168637, filed by Michael J. Lagrosas, states that other infractions not provided for herein shall be penalized
assails the Decision[1] dated January 28, 2005 and the in the most appropriate manner at the discretion of management.[5] In
his memo, Lagrosas admitted that he accidentally hit Lim when she
tried to intervene. He explained that he did not intend to hit her as
shown by the fact that he never left the hospital until he was assured
that she was all right.[6]
In the disciplinary hearing that followed, it was established
that Lagrosas and Lim had physical confrontations prior to the
incident. But Lagrosas denied saying that he might not be able to
control himself and hurt Lim and her boyfriend if he sees them
together.
On March 23, 2000, Bristol-Myers dismissed Lagrosas
effective immediately.[7] Lagrosas then filed a complaint[8] for illegal
dismissal, non-payment of vacation and sick leave benefits,
13th month pay, attorneys fees, damages and fair market value of his
Team Share Stock Option Grant.
On February 28, 2002, Labor Arbiter Renaldo O. Hernandez
rendered a Decision[9] in NLRC NCR Case No. 00-03-02821-
99, declaring the dismissal illegal. He noted that while Lagrosas
committed a misconduct, it was not connected with his work. The
incident occurred outside of company premises and office hours. He
also observed that the misconduct was not directed against a co-
employee who just happened to be accidentally hit in the
process. Nevertheless, Labor Arbiter Hernandez imposed a penalty of
three months suspension or forfeiture of pay to remind Lagrosas not to
be carried away by the mindless dictates of his passion. Thus, the
Arbiter ruled:
WHEREFORE, premises considered,
judgment is hereby [rendered] finding that respondent
company illegally dismissed complainant
thus, ORDERING it:
1) [t]o reinstate him to his former position
without loss of seniority rights, privileges and benefits
and to pay him full backwages reckoned from [the]
date of his illegal dismissal on 23 March 2000
including the monetary value of his vacation/sick
leave of 16 days per year reckoned from July 1, 2000
until actually reinstated, less three (3) months salary
as penalty for his infraction;
2) to pay him the monetary equivalent of his
accrued and unused combined sick/vacation leaves
as of June 30, 2000 of 16 days x 3 years and 4
months 10 days x P545.45 = P23,636.16 and the
present fair market value of his Team Share stock
option grant for eight hundred (800) BMS common
shares of stock listed in the New York Stock
Exchange which vested in complainant as of 01 July
1997, provisionally computed as 90% (800 shares x
US$40.00 per share x P43.20/US$ = P1,244,160.00).
3) to pay him Attorneys fee of 10% on the
entire computable amount.
All other claims of complainant are dismissed
for lack of merit.
SO ORDERED.[10]
On appeal, the National Labor Relations Commission (NLRC)
set aside the Decision of Labor Arbiter Hernandez in its
Decision[11] dated September 24, 2002.It held that Lagrosas was
validly dismissed for serious misconduct in hitting his co-employee
and another person with a metal steering wheel lock. The gravity and
seriousness of his misconduct is clear from the fact that he deliberately
waited for Lim and Menquito to return to McDonalds. The NLRC also
ruled that the misconduct was committed in connection with his duty
as Territory Manager since it occurred immediately after the district
meeting of territory managers.
Lagrosas moved for reconsideration. On May 7, 2003, the
NLRC issued a Resolution[12] reversing its earlier ruling. It ratiocinated
that the incident was not work-related since it occurred only after the
district meeting of territory managers. It emphasized that for a serious
misconduct to merit dismissal, it must be connected with the
employees work. The dispositive portion of the Resolution states:
WHEREFORE, premises considered, We
find this time no reason to alter the Labor Arbiters
Decision of February 28, 2002 and hereby affirm the
same in toto. We vacate our previous Decision
of September 24, 2002.
SO ORDERED.[13]
Bristol-Myers filed a motion for reconsideration which the
NLRC denied in an Order dated February 4, 2004 in NLRC NCR Case
No. 00-03-02821-99 (NLRC NCR CA No. 031646-02).[14] Later, Labor
Arbiter Hernandez issued a writ of execution.[15] Notices of
garnishment were then served upon the Philippine British Assurance
Co., Inc. for the supersedeas bond posted by Bristol-Myers and the
Bank of the Philippine Islands for the balance of the judgment
award.[16]
Bristol-Myers moved to quash the writ of execution
contending that it timely filed a petition for certiorari with the Court of
Appeals. The appellate court gave due course to Bristol-Myers petition
and issued a temporary restraining order (TRO)[17] enjoining the
enforcement of the writ of execution and notices of garnishment. Upon
the expiration of the TRO, the appellate court issued a writ of
preliminary injunction dated September 17, 2004.[18]
Bristol-Myers then moved to discharge and release the TRO
cash bond. It argued that since it has posted an injunction cash bond,
the TRO cash bond should be legally discharged and released.
On January 28, 2005, the appellate court rendered the
following Decision:
WHEREFORE, the petition
is GRANTED. The Resolution of May 7, 2003 and the
Order of February 4, 2004 in NLRC NCR Case No.
[00-03-02821-99] (NLRC NCR CA No. [031646-02]),
are REVERSED and SET ASIDE. The public
respondent NLRCs Decision dated September 24,
2002 which reversed the Labor Arbiters decision and
in effect sustained the legality of the private
respondents termination and the dismissal of his
claim for the fair market value of the [Team Share]
stock option grant
is REINSTATEDand AFFIRMED, with MODIFICATI
ON that the petitioner shall pay the private
respondent the monetary equivalent of his accrued
and unused combined sick/vacation leave plus ten
(10%) percent thereof, as attorneys fees. The
injunction bond and the TRO bond previously posted
by the petitioner are DISCHARGED.
SO ORDERED.[19]
The appellate court considered the misconduct as having
been committed in connection with Lagrosas duty as Territory
Manager since it occurred immediately after the district meeting of
territory managers. It also held that the gravity and seriousness of the
misconduct cannot be denied. Lagrosas employed such a degree of
violence that caused damage not only to Menquitos car but also
physical injuries to Lim and Menquito.
Lagrosas filed a motion for reconsideration which the
appellate court denied.
In the meantime, Bristol-Myers moved to release the TRO
cash bond and injunction cash bond in view of the Decision
dated January 28, 2005. On August 12, 2005, the appellate court
denied the motion as premature since the decision is not yet final and
executory due to Lagrosas appeal to this Court.[20]
Bristol-Myers filed a motion for reconsideration. On October
28, 2005, the appellate court resolved:
WHEREFORE, the petitioners Motion [f]or
Reconsideration dated September 6,
2005 is PARTIALLY GRANTED and the Resolution
of August 12, 2005 is RECONSIDERED and SET
ASIDE. The temporary restraining order cash bond in
the amount of SIX HUNDRED THOUSAND PESOS
(P600,000.00) which was posted by the petitioners
on July 19, 2004 is
ordered DISCHARGED and RELEASED to the
petitioners.
SO ORDERED.[21]
The appellate court held that upon the expiration of the TRO,
the cash bond intended for it also expired. Thus, the discharge and
release of the cash bond for the expired TRO is proper. But the
appellate court disallowed the discharge of the injunction cash bond
since the writ of preliminary injunction was issued pendente lite.Since
there is a pending appeal with the Supreme Court, the Decision
dated January 28, 2005 is not yet final and executory.
Hence, the instant petitions.
In G.R. No. 168637, Lagrosas assigns the following errors:
I.
THE HONORABLE COURT OF APPEALS IN
DECLARING THAT THE TERMINATION OF
EMPLOYMENT OF THE PETITIONER-APPELLANT
WAS LEGAL HAD DECIDED A QUESTION OF
SUBSTANCE IN A WAY NOT IN ACCORD WITH
THE LABOR LAWS AND JURISPRUDENCE AND
DEPARTED FROM THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS, AS TO
CALL FOR THE EXERCISE OF THIS HONORABLE
COURTS POWER OF REVIEW AND/OR
SUPERVISION.
II.
THE HONORABLE COURT OF APPEALS IN
IMPOSING THE PENALTY OF DISMISSAL, BEING
A PENALTY TOO HARSH IN THIS CASE, DECIDED
A QUESTION OF SUBSTANCE IN A WAY NOT IN
ACCORD WITH THE LABOR LAWS AND
JURISPRUDENCE AND DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS, AS TO CALL FOR THE EXERCISE
OF THIS HONORABLE COURTS POWER OF
REVIEW AND/OR SUPERVISION.[22]
 In G.R. No. 170684, Bristol-Myers raises the following issue:
[WHETHER OR NOT THE HONORABLE] COURT
OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN DISALLOWING THE
RELEASE AND DISCHARGE OF PETITIONERS
INJUNCTION BOND.[23]
Simply put, the basic issues in the instant petitions are: (1) Did
the Court of Appeals err in finding the dismissal of Lagrosas legal?
and (2) Did the Court of Appeals err in disallowing the discharge and
release of the injunction cash bond?
On the first issue, serious misconduct as a valid cause for the
dismissal of an employee is defined simply as improper or wrong
conduct. It is a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error of judgment. To be serious
within the meaning and intendment of the law, the misconduct must
be of such grave and aggravated character and not merely trivial or
unimportant. However serious such misconduct, it must, nevertheless,
be in connection with the employees work to constitute just cause for
his separation. The act complained of must be related to the
performance of the employees duties such as would show him to be
unfit to continue working for the employer.[24]
Thus, for misconduct or improper behavior to be a just cause
for dismissal, it (a) must be serious; (b) must relate to the performance
of the employees duties; and (c) must show that the employee has
become unfit to continue working for the employer. [25]
Tested against the foregoing standards, it is clear that
Lagrosas was not guilty of serious misconduct. It may be that the injury
sustained by Lim was serious since it rendered her unconscious and
caused her to suffer cerebral contusion that necessitated
hospitalization for several days. But we fail to see how such
misconduct could be characterized as work-related and reflective of
Lagrosas unfitness to continue working for Bristol-Myers.
Although we have recognized that fighting within company
premises may constitute serious misconduct, we have also held that
not every fight within company premises in which an employee is
involved would automatically warrant dismissal from service. [26] More
so, in this case where the incident occurred outside of company
premises and office hours and not intentionally directed against a co-
employee, as hereafter explained.
First, the incident occurred outside of company premises and
after office hours since the district meeting of territory managers which
Lim attended at McDonalds had long been finished. McDonalds may
be considered an extension of Bristol-Myers office and any business
conducted therein as within office hours, but the moment the district
meeting was concluded, that ceased too. When Lim dined with her
friends, it was no longer part of the district meeting and considered
official time. Thus, when Lagrosas assaulted Lim and Menquito upon
their return, it was no longer within company premises and during
office hours. Second, Bristol-Myers itself admitted that Lagrosas
intended to hit Menquito only. In the Memorandum[27] dated March 23,
2000, it was stated that You got out from your car holding an umbrella
steering wheel lock and proceeded to hit Mr. Menquito. Dulce tried to
intervene, but you accidentally hit her on the head, knocking her
unconscious.[28]Indeed, the misconduct was not directed against a co-
employee who unfortunately got hit in the process. Third, Lagrosas
was not performing official work at the time of the incident. He was not
even a participant in the district meeting. Hence, we fail to see how his
action could have reflected his unfitness to continue working for
Bristol-Myers.
In light of Bristol-Myers failure to adduce substantial evidence
to prove that Lagrosas was guilty of serious misconduct, it cannot use
this ground to justify his dismissal. Thus, the dismissal of Lagrosas
employment was without factual and legal basis.
On the second issue, it is settled that the purpose of a
preliminary injunction is to prevent threatened or continuous
irremediable injury to some of the parties before their claims can be
thoroughly studied and adjudicated. Its sole aim is to preserve
the status quo until the merits of the case can be heard fully.[29]
A preliminary injunction may be granted only when, among
other things, the applicant, not explicitly exempted, files with the court
where the action or proceeding is pending, a bond executed to the
party or person enjoined, in an amount to be fixed by the court, to the
effect that the applicant will pay such party or person all damages
which he may sustain by reason of the injunction or temporary
restraining order if the court should finally decide that the applicant
was not entitled thereto. Upon approval of the requisite bond, a writ of
preliminary injunction shall be issued.[30]
The injunction bond is intended as a security for damages in
case it is finally decided that the injunction ought not to have been
granted. Its principal purpose is to protect the enjoined party against
loss or damage by reason of the injunction, and the bond is usually
conditioned accordingly.[31]
In this case, the Court of Appeals issued the writ of preliminary
injunction to enjoin the implementation of the writ of execution and
notices of garnishment pending final resolution of this case or unless
the [w]rit is sooner lifted by the Court.[32]
By its Decision dated January 28, 2005, the appellate court
disposed of the case by granting Bristol-Myers petition and reinstating
the Decision dated September 24, 2002 of the NLRC which dismissed
the complaint for dismissal. It also ordered the discharge of the TRO
cash bond and injunction cash bond. Thus, both conditions of the writ
of preliminary injunction were satisfied.
Notably, the appellate court ruled that Lagrosas had no right
to the monetary awards granted by the labor arbiter and the NLRC,
and that the implementation of the writ of execution and notices of
garnishment was properly enjoined. This in effect amounted to a
finding that Lagrosas did not sustain any damage by reason of the
injunction. To reiterate, the injunction bond is intended to protect
Lagrosas against loss or damage by reason of the injunction
only. Contrary to Lagrosas claim, it is not a security for the judgment
award by the labor arbiter.[33]
Considering the foregoing, we hold that the appellate court
erred in disallowing the discharge and release of the injunction cash
bond.
 WHEREFORE, the two consolidated petitions
are GRANTED. In G.R. No. 168637, filed by Michael J. Lagrosas, the
Decision dated January 28, 2005, and the Resolution dated June 23,
2005 of the Court of Appeals in CA-G.R. SP No. 83885
are REVERSED. The Resolution dated May 7, 2003, and the Order
dated February 4, 2004 of the NLRC in NLRC NCR Case No. 00-03-
02821-99 (NLRC NCR CA No. 031646-02) are REINSTATED and
hereby AFFIRMED.

In G.R. No. 170684, filed by Bristol-Myers Squibb (Phil.),

Inc./Mead Johnson Phil., the Resolutions dated August 12,
2005 and October 28, 2005 of the Court of Appeals in CA-G.R. SP No.
83885 are REVERSED. The injunction cash bond in the amount of
SIX HUNDRED THOUSAND PESOS (P600,000) which was posted
by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil.
on September 17, 2004 is hereby
ordered DISCHARGED and RELEASED to it.

No pronouncement as to costs.

SO ORDERED.
 Republic of the Philippines sign of goodwill, which amount Burgos accepted in his capacity
SUPREME COURT as union president.
Manila
At the union’s general membership meeting on February 7, 2003,
SECOND DIVISION Burgos made the following remarks in response to a question
raised on the floor concerning the status of the US$1,000 gift:
G.R. No. 171927 June 29, 2007 "What is the problem if the US$1,000 is with me. It is intact. Don’t
worry. Just wait because we will buy gifts for everybody. The
KEPHILCO MALAYA EMPLOYEES UNION and LEONILO amount of US$1,000 is a small amount compared to a KIA plus
BURGOS, petitioners, ₱700,000, which was possibly offered in exchange for the CBA
vs. during the negotiation but which I did not show any interest
KEPCO PHILIPPINES CORPORATION, respondent. in."2 (Underscoring supplied)

DECISION On the directive of respondent after learning of Burgos’ remarks,

an initial investigation was conducted, the results of which
became the basis of the filing of an administrative charge against
CARPIO MORALES, J.:
Burgos for violation of the following sections in respondent’s
Company Code of Employee Discipline:
Petitioners challenge the January 13, 2006 Decision and the
March 3, 2006 Resolution of the Court of Appeals1finding grave
7.33 Initiating and[/]or engaging in any kind of activity (collective
abuse of discretion on the part of the National Labor Relations
and[/]or individual) which causes damage and/or prejudice to the
Commission (NLRC) in reversing the labor arbiter’s decision.
Company, its officers and employees (i.e. instigation)
Kepco Philippines Corporation (respondent), a subsidiary of
7.34 Sending and/or disseminating letters or communications
Korea Electric Power Corporation (KEPCO), is engaged in the
which tends [sic] to discredit or cause damage to the Company,
business of power generation as an independent power producer
its officers or its employees.3 (Underscoring supplied)
which operates the Malaya Thermal Power Plant in Pililla, Rizal.
Giving his side on the matter, Burgos, in a letter to the KEPCO
On January 16, 1996, respondent employed petitioner Leonilo
president which was quoted in his verified Position Paper,
Burgos (Burgos) as a first class turbine operator with a monthly
recalled the conversation that transpired between him and
salary of ₱38,758. Four years later, Burgos became the president
respondent’s personnel manager bearing on his above-
of co-petitioner Kephilco Malaya Employees Union (the union),
questioned remarks about a "Kia plus ₱700,000" as follows:
the certified collective bargaining agent of respondent’s rank-and-
file employees.
Sometime in June 2000, Mr. K.Y. Kim, the Personnel Manager
then, requested for a meeting with the KMEU officers. It was
Sometime in November 2002, the president of KEPCO visited the
scheduled at 1:00 PM. Among the officers, I was the first to
plant site and granted the employees the sum of US$1,000 as a
arrive. Mr. K.Y. Kim also arrive[d] ahead. Mr. Kim and I talked
with each other. During the conversation, he casually asked me:
‘Do you have a service?’ I answered: ‘Yes, I have: two (2) cars,
one (1) brand new and one (1) second hand.’ Then he said: ‘How
about my KIA PREGIO plus P700,000.00?’ Thinking that he was
testing me (sinusubukan ako), I said with a smile: ‘For what? For
CBA exchange?’ He laughed at my answer but did not make any
reply. He just told me that he was leaving for Korea for good in
August or September.4 (Underscoring supplied)
Respondent, on the other hand, proffered that Kim denied
Burgos’ allegation. It presented no written statement of Kim,
however.
After notice and hearing,5 respondent found Burgos guilty of
violating Section 7.34 (disseminating communications which tend
to discredit or cause damage to the company, its officers or its
employees), punishable by outright dismissal. It accordingly
terminated his employment effective at the close of business
hours of July 1, 2003, by notice of termination dated June 30,
2003.6
Conciliation before the National Conciliation and Mediation Board
having failed, Burgos filed on August 29, 2003 a complaint for
illegal dismissal, unfair labor practice, and damages, docketed as
NLRC NCR Case No. 08-10165-03.
By Decision of March 31, 2004, the labor arbiter upheld the
legality of the dismissal but awarded separation pay to Burgos in
the interest of justice. The dispositive portion of the decision
reads:
WHEREFORE, respondent-KEPCO PHILIPPINES
CORPORATION is hereby directed to pay complainant’s
separation pay equivalent to one month’s salary for every year of
service in the total amount of (P271,306.00) TWO HUNDRED
SEVENTY ONE THOUSAND THREE HUNDRED AND SIX
PESOS (₱38,658.00 X 7 years).
SO ORDERED.7
Petitioners appealed to the NLRC while respondent partially
appealed with respect to the grant of separation pay.
By Resolutions of April 28, 2005 and June 30, 2005,8 the NLRC
reversed the decision of the labor arbiter and denied respondent’s
motion for reconsideration, respectively. The dispositive portion of
the main resolution reads:
WHEREFORE, the assailed decision of 31 March 2004 is
REVERSED and SET ASIDE. Accordingly, the respondent
company is hereby ordered to immediately reinstate complainant-
appellant LEONILO C. BURGOS to his former position without
loss of seniority rights and other benefits and to pay him full
backwages from the time his salary was illegally withheld from
him up to the date of his actual reinstatement, which is computed
as of the date of the promulgation of this Resolution in the total
amount of NINE HUNDRED FIFTEEN THOUSAND THREE
HUNDRED THIRTY FOUR and 77/100 (P915,334.77) PESOS
plus ten (10%) percent of the total monetary award in the amount
of NINETY ONE THOUSAND FIVE HUNDRED THIRTY THREE
AND 48/100 (P91,533.48) PESOS as and by way of attorney’s
fees.
For lack of factual or legal basis, all other claims are dismissed.
SO ORDERED.9
Respondent elevated the case via petition for certiorari to the
Court of Appeals which granted the same by the assailed
decision and resolution which reversed those of the NLRC.
The dispute boils down to the issue of whether Burgos’ remarks
in the course of a union meeting constitute serious misconduct to
warrant his dismissal from employment.
The petition is impressed with merit.
Serious misconduct is defined as the transgression of some
established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent
and not mere error of judgment.10 To be serious within the
meaning and intendment of the law, the misconduct must be of
such grave and aggravated character and not merely trivial or
unimportant.11
The labor arbiter observed that Burgos’ remarks could spark
unrest of dire consequences and ignite a nationwide dispute of
disastrous effects. Other than the irrelevant fact that preventive
mediation failed, however, the labor arbiter cited no substantial
evidence to support the sweeping conclusion.
In reversing the labor arbiter’s decision, the NLRC found that in
making the questioned remarks, Burgos could have sought to
prove his sincerity to the union members and disabuse their
minds of any allusion of misappropriation by laying stress on his
personal disinterest in pecuniary matters and by citing, in the
interest of transparency, what he must have believed was an
attempt at subornation, which he deemed put his integrity to the
test.
It is settled doctrine that in controversies between a worker and
his employer, doubts reasonably arising from the evidence or in
the interpretation of agreements and writings should be resolved
in the worker’s favor.12
Moreover, serious misconduct requires a wrongful intent,13 the
presence of which this Court fails to appreciate, the controversial
remarks having been uttered in the course of a legitimate union
meeting over which Burgos presided as head.
In Lopez v. Chronicle Publications Employees Association,14 upon
which respondent relies to support its case, the employees were
dismissed for publishing in the union newspaper their suspicion
which actually amounted to a public accusation that their
employer was exerting political pressure on a public official to
thwart some legitimate activities of the employees.
Respondent’s reliance on Lopez is misplaced, however. The
therein erring employee deliberately and unnecessarily utilized a
different medium– one of a permanent nature–15 without any
justification.16
This Court is not, of course, unmindful of cases17 involving
unpleasant verbal communication in the workplace. The attendant
factual antecedents in the present case do not, however,
sufficiently reflect a scornful attitude and depravity of conduct on
the part of Burgos for his questioned remarks to be considered as
serious misconduct.
In St. Michael’s Institute v. Santos,18 this Court reinstated the
employees who were dismissed for uttering offensive remarks in
their speeches denouncing the corrupt practices of the
administration in an assembly. In finding dismissal too harsh a
penalty, this Court ruled:
The employer’s right to conduct the affairs of [its] business,
according to its own discretion and judgment, is well-recognized.
An employer has a free reign and enjoys wide latitude of
discretion to regulate all aspects of employment, including the
prerogative to instill discipline in its employees and to impose
penalties, including dismissal, upon erring employees. This is a
management prerogative, where the free will of management to
conduct its own affairs to achieve its purpose takes form. The
only criterion to guide the exercise of its management prerogative
is that the policies, rules and regulations on work-related activities
of the employees must always be fair and reasonable and the
corresponding penalties, when prescribed, commensurate to the
offense involved and to the degree of the infraction.19
The magnitude of the infraction must thus be weighed and appropriate amount less the compensation actually received
equated with the penalty prescribed and must be commensurate during reinstatement pending appeal.
thereto. Where a penalty less punitive would suffice, whatever
missteps may have been committed by the employee ought not to SO ORDERED.
be visited with a consequence so severe such as dismissal from
employment.20

In labor-management relations, there can be no higher penalty

than dismissal from employment. For it severs employment ties
and could well be the economic death sentence of an employee.
Dismissal prejudices the socio-economic well-being of the
employee’s family and threatens the industrial peace. Due to its
far-reaching implications, the Labor Code decrees that an
employee cannot be dismissed, except for the most serious
causes. The overly concern of our laws for the welfare of
employees is in accord with the social justice philosophy of our
Constitution.21 Indeed, the employer’s inherent right to discipline
is subject to reasonable regulation by the State in the exercise of
its police power.22

Records show that respondent paid Burgos his salary from

October 24-31, 2005,23 in compliance with the order of
reinstatement pending appeal. There is no showing that
respondent resumed compliance with the January 19, 2006
Order24 re-enforcing the reinstatement pending appeal after the
expiration of the 60-day Temporary Restraining Order issued by
the Court of Appeals.25 The salary which respondent paid Burgos
for the period October 24-31, 2005 must thus be excluded in the
computation of the award of backwages.

WHEREFORE, the petition is GRANTED. The January 13, 2006

Decision and the March 3, 2006 Resolution of the Court of
Appeals are REVERSED and SET ASIDE.

The April 28, 2005 Resolution of the National Labor Relations

Commission is REINSTATED, with modification in the
computation of the total monetary benefits to reflect the current
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 103209 July 28, 1997
APOLONIO BONDOC and GENUINE LABOR ORGANIZATION
OF WORKERS in HOTEL, RESTAURANT AND ALLIED
INDUSTRIES (GLOWHRAIN) — Silahis International
Chapter, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and SILAHIS
INTERNATIONAL HOTEL, INC., respondents.
FRANCISCO, J.:
On September 27, 1990, petitioner GLOWHRAIN, a legitimate
labor organization and exclusive bargaining agent of the rank-
and-file employees of private respondent Silahis International
Hotel (SILAHIS), filed a notice of strike against the latter for
alleged harassment, arbitrary transfer of employee and illegal
suspension and termination of petitioner Bondoc, a hotel
employee and union officer. Conciliation proceedings before the
National Conciliation and Mediation Board (NCMB) were
conducted without success. To avert the strike, the dispute was
certified for compulsory arbitration by the Department of Labor
and Employment (DOLE) to public respondent National Labor
Relations Commission (NLRC)1 where the parties submitted
position papers, reply and evidences.
After hearing, the NLRC rendered judgment2 the dispositive
portion of which reads:
WHEREFORE, in view of all the foregoing considerations,
judgment is hereby rendered, declaring the dismissal of Apolonio
Bondoc valid and legal, and consequently dismissing his
complaint for lack of merit; however, let Bondoc's earned payroll
reinstatement, as directed in the Order, dated October 31, 1990,
of the Secretary of Labor and Employment, be treated as financial
assistance and deemed cancelled as of the promulgation of this
Decision.
SO ORDERED.3
Failing in their motion for reconsideration,4 petitioners filed this
petition for certiorari under Rule 65 imputing grave abuse of
discretion to the NLRC in ruling that petitioner Bondoc was
dismissed for cause and with due process.5
The antecedents, as found by the NLRC, are as follows:6
[O]n four separate occasions from August 20, 1990 to August 23,
1990, head waiter Bondoc accosted his female co-employee
Vima Valenzuela and threatened her with bodily harm, aside from
hurling at her slanderous statements and invectives, thus
subjecting her to harassments (sic) and vexations. First, on
August 20, 1990 at around 5:00 A.M. while Valenzuela was
reading a newspaper after duty, Bondoc approached her and
threatened to oust her from the company, warning that her days
were numbered, and even throwing a crumpled paper at her.
Second, at around 9:50 A.M. of the same day, Bondoc again
approached Valenzuela while she was about to punch her time
card and shouted invectives at her, threatening her with physical
harm and saying her days were numbered. This kind of
harassment was repeated moments later. For the third time, on
August 21, 1990 Bondoc continued to harass with threats
Valenzuela who was then at the PAGCOR canteen in the
presence of her co-employees and hotel guests. Fourth incident,
on August 23, 1990, while Valenzuela was at the canteen taking
her break with a co-employee, Bondoc appeared and bullied her,
uttering "Bilang na ang araw mo. Mag-ingat ka paglabas mo sa
Silahis."
The affidavit of Valenzuela was corroborated by the sworn
statements of her co-employees, namely, Agnes Bonifacio and
Christine Alegao (Annexes "3", "4", and "5", Silahis Position
Paper) and these declarations under oath were not denied by
Bondoc.
The record moreover reveals that Valenzuela became the object
of Bondoc's ire after she reported to her assistant managers an
incident regarding the supposedly unauthorized bringing of food
by a waiter to the union office where Bondoc was then waiting.
Valenzuela reported the threats to the police and the series of
incidents to hotel management. Silahis, through its personnel
manager, issued an office memorandum, dated September 3,
1990 (Annex "6"), charging Bondoc with violation of company
rules and asking him to submit his written explanation for the
imputed offenses. Instead of submitting an explanation, he merely
indicated by way of marginal note that he was receiving the
memo "under protest" and referred to an incident report of August
20, 1990. Thereafter, Silahis conducted its own investigation and,
on September 6, 1990, preventively suspended Bondoc (Annex
"6").
On October 4, 1990, SILAHIS issued a memorandum whereby
petitioner Bondoc's services were terminated effective October 6,
1990. Claiming that he was illegally dismissed, petitioner Bondoc
sought the help of petitioner GLOWHRAIN. This labor dispute is
among the grounds that led to the strike earlier mentioned.
In dismissal cases, there must be observance of (1) the
procedural requirement that the employee was accorded due
process — basic of which is the opportunity to be heard and (2)
the substantive requirement that the dismissal is for a cause
provided in the Labor Code.7 The employer has the burden of
proving that both requirements are satisfied.8
Anent the procedural requirement, Rule XIV, Book V, of
the Omnibus Rules Implementing the Labor Code outlines the
procedure for termination of employment, to wit:
Sec. 1. Security of tenure and due process. — No worker shall be
dismissed except for a just or authorized cause provided by law
and after due process.
Sec. 2. Notice of Dismissal. — Any employer who seeks to
dismiss a worker shall furnish him a written notice stating the
particular acts or omissions constituting the grounds for his
dismissal. In cases of abandonment of work, the notice shall be
served at the worker's last known address.
xxx xxx xxx
Sec. 5. Answer and hearing. — The worker may answer the
allegations stated against him in the notice of dismissal within a
reasonable period from receipt of such notice. The employer shall
afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representatives, if he so
desires.
Sec. 6. Decision to dismiss. — The employer shall immediately
notify a worker in writing of a decision to dismiss him stating
clearly the reasons therefor.
Sec. 7. Right to contest dismissal. — Any decision taken by the
employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a complaint
with the Regional Branch of the Commission.
xxx xxx xxx
Sec. 11. Report on dismissal. — The employer shall submit a
monthly report to the Regional Office having jurisdiction over the
place of work all dismissals effected by him during the month,
specifying therein the names of the dismissed workers, the
reasons for their dismissal, the dates of commencement and
termination of employment, the positions last held by them and
such other information as may be required by the Ministry
(Department) for policy guidance and statistical purposes.
(Emphasis supplied).
SILAHIS failed to furnish petitioner Bondoc either of the required
notices, which are:
(a) a notice containing a statement of the particular acts or
omissions for which his dismissal is sought, and
(b) after affording the employee an opportunity to be heard,
another notice informing the latter of the employer's decision to
dismiss him.9
Contrary to SILAHIS' claim, its September 3, 1990 memorandum
which reads:
SILAHIS INTERNATIONAL HOTEL
Memorandum
TO : MR. APOLONIO BONDOC
F & B Casino — A/Headwaiter
FROM : Personnel Manager
DATE : September 3, 1990
RE : POLICE REPORT
On the attached written report of the W.P.D. Police Station No. 7,
please explain within 24 hours after receipt of this memorandum,
why no disciplinary action should be taken against you for having
violated Rule No. V "Disturbing Peace & Order", Section 2, page
41 of our Employee's Handbook RE: "Threat or Inflicting Bodily
Harm" — Threatening or intimidating another with bodily harm or
does something illegal or immoral to another employee or his
family in connection with his job, or against guest/s.
Grave Threats (4 counts) and slander to co-employee with
infliction upon the employee's honor is a violation of Company
Rules & Regulations.
Please submit your written explanation, failure on your part to
comply with (sic) is giving up your right to be heard, and
Management has the right to take necessary legal action.
For your strict compliance.
(Sgd.) (Sgd.)
TEDDY M. JIMENEZ REYNALDO DE LOS REYES
Personnel Manager Casino Service Manager
xxx xxx xxx 10
is not substantial compliance with the first kind of notice. The
memorandum does not state with particularity the acts and
omission for which petitioner is being charged. The statement
therein directing petitioner Bondoc to explain "why no disciplinary
action should be taken against you for having violated Rule No. V
'Disturbing Peace and Order', Section 2" of the Employee's
Handbook is couched in too-general terms, without any narration
whatsoever as to how petitioner Bondoc committed said
infractions. It thus cannot be said that petitioner Bondoc was
informed with particularity of the acts and omissions for which he
is being charged:
Neither can SILAHIS' October 4, 1990 memorandum be
considered compliance with the second required notice. That
memorandum, reading:
TO : MR. APOLONIO BONDOC
F &B Casino Headwaiter
FROM : MANAGEMENT
DATE : October 4, 1990
RE : TERMINATION
Your case has been deliberated thoroughly by the Management
regarding your grave threat to Ms. Vima Valenzuela, F & B
Checker on different occasions, August 19, 20, 21 and 23, 1990,
inside the hotel premises, and after reviewing all supporting
documents at hand, sworn statements of witnesses, Police Crime
Report dated 29 August 1990, and your explanation letter on
August 26, 1990, addressed to Mr. Ren de los Reyes, Casino
Service Manager, the Management concluded that you are guilty
of having violated:
Rule IV — Threat, Coercion
Sec. 2 — Threatening or intimidating another with bodily harm or
does something illegal or immoral to the other employee or his
family in connection with his job or against guests.
For this reason, your employment service with the Company is
being terminated effective October 06, 1990.
For your information and strict compliance.
Recommending Approval:
(Sgd.) TEDDY M. JIMENEZ (Sgd.) JOEL TADURAN
Approved by:
(Sgd) MICHAEL WILSON 11 (Emphasis supplied)
does not "clearly" cite the reason for the dismissal, contrary to the
requirements set by Section 6, Rule XIV, Book V of the Omnibus
Rules, which provides:
Sec. 6. Decision to dismiss. The employer shall immediately
notify a worker in writing of a decision to dismiss him stating
clearly the reasons therefor.
The conclusion that petitioner Bondoc was guilty of having
violated Rule IV, Section 2 of the Company Rules is, as in the
September 3, 1990 memorandum, lacking in specification.
Aside from its failure to give notices, SILAHIS appears to have
rendered its judgment of dismissal without affording petitioner the
opportunity to be heard personally. This is evident from the fact
that upon petitioner Bondoc's receipt on September 6, 1990 of a
SILAHIS memorandum 12 placing him under preventive
suspension effective on even date, another memorandum from
the Chief of Security of SILAHIS was issued 13 — a BAN ORDER
to be precise — banning petitioner Bondoc from entering the
hotel premises pending the resolution of his case to take effect on
the same date of September 6, 1990. There was, thus, no way for
petitioner Bondoc to have personally attended the hearing/s that
might have been conducted at any time between September 6,
1990 and October 4, 1990 when SILAHIS handed down its
decision to terminate his services.
The SILAHIS October 4, 1990 memorandum, nonetheless, would
want to impress that its judgment of dismissal duly considered
petitioner Bondoc's explanation on the matter. We again quote a
portion of said memorandum, to wit:
xxx xxx xxx
Your case has been deliberated thoroughly by the Management
regarding your grave threat to Ms. Vima Valenzuela, F & B
Checker on different occasions, August 19, 20, 21 and 23, 1990,
inside the hotel premises, and after reviewing all supporting
documents at hand, sworn statements of witnesses, Police Crime
Report dated 29 August 1990, and your explanation letter on
August 26, 1990, addressed to Mr. Ren de los Reyes, Casino
Service Manager, the Management concluded that you are guilty
of having violated:
xxx xxx xxx
(Emphasis supplied)
The August 26, 1990 explanation-letter adverted to in said
memorandum of termination, however, could not have possibly
referred to the charges (Grave Threats and Slander) for which
petitioner Bondoc's dismissal is being sought, considering that
it antedates SILAHIS' September 3, 1990 memorandum (earlier
quoted) wherein petitioner Bondoc was, for the first time, required
to explain away in writing said charges. It thus becomes equally
evident that the dismissal in reality did not take into account any
written explanation from petitioner — brought about either by
mere inadvertence in having considered an entirely different
explanation, or by a deliberate act of SILAHIS of ignoring any
evidence on behalf of petitioner Bondoc.
Let it be stressed anew that a dismissal without the benefit of a
hearing prior to his termination violates an employee's
constitutional right to due process which requires that the person
sought to be dismissed must be given a chance to answer the
charges against him before he is dismissed. 14
On the substantive aspect, it however appears that petitioner
Bondoc does not deny having uttered the following statements to
his co-employee. Vima Valenzuela on different occasions, to wit:
— Di bale bilang na rin naman ang araw mo.
— Sige lang, patawa tawa ka pa, eh bilang na bilang na ang araw
mo.
— Matakot ka sa diyos, bilang na ang araw mo; Mag-ingat ka sa
paglabas mo sa Silahis Hotel.
— Unggoy . . . ulol.
These statements unquestionably partake the form of Threat or
Coercion, as defined and penalized under Section 2, Rule V of
SILAHIS' General Company Rules which reads:
Sec. 2: Threat, Coercion
Threatening or intimidating another with bodily harm or does
something illegal or immoral to the other employee or his family in
connection with his job, or against guest.
This offense of Threat/Coercion, under the company rules'
"Systems of Sanctions", 15 is categorized as a third to fourth
degree (3º to 4º) violation, with a fourth commission of said
infraction warranting the penalty of dismissal. Petitioner Bondoc
having made four (4) threatening/coercive remarks as
aforementioned, dismissal indeed was the appropriate sanction.
We thus quote with approval the following disquisitions made by
respondent NLRC, to wit:
. . . we uphold the right of the company to dismiss Bondoc for
violation of reasonable disciplinary rules and for committing series
of serious misconduct. Let it be stressed that the company is
engaged in hotel business which is a dollar earning industry and,
as such, it has the duty to maintain an atmosphere of peace and
tranquility (sic) within its premises, an expect from its employees
to observe orderly conduct. "To condone (Bondoc's) conduct will
erode the discipline that an employer should uniformly apply so
that it can expect compliance to the same rules and regulations
by its employees', to paraphrase the Highest Tribunal (148 SCRA
532 (1987)).
WHEREFORE, save for the MODIFICATION ordering private
respondent SILAHIS INTERNATIONAL HOTEL INC. to pay
petitioner Apolonio Bondoc two thousand pesos (P2,000.00) as
indemnity for non-observance of due process, the assailed NLRC
March 29, 1991 decision declaring the validity of petitioner's
dismissal is hereby AFFIRMED in all other respects.
SO ORDERED.

To be sure, "an employer cannot be compelled to continue with

the employment of workers guilty of acts of misfeasance or
malfeasance, and whose continuance in the service of the
employer is clearly inimical to its interest, and that the law, in
protecting the rights of workers, authorizes neither the oppression
nor self-destruction of employer." (San Miguel Corporation v.
NLRC, 173 SCRA (sic) [1989]). It was likewise held that where
the continued employment of an employee poses a serious and
imminent threat to the life and property of the employer or his co-
employees, preventive suspension is proper. (Manila Doctors
Hospital v. NLRC, 135 SCRA 262, 268 (1985). There is more
reason for dismissal where the employee's acts of misconduct
and willful breach of trust are repeatedly committed by the
employee (Piedad v. Lanao Del Norte Electric Co., Inc., 153
SCRA 500 [1987]). One final word "the employer's obligation to
give his workers just compensation and treatment carries with it
the collorary (sic) right to expect from the workers adequate work,
diligence and good conduct." (Firestone Tire and Rubber
Company of the Philippines v. Lariosa, 148 SCRA 187, 190-191
[1987]). 16

In fine, petitioner Bondoc's dismissal, being based on just cause,

is in order. Petitioner Bondoc is nevertheless entitled to indemnity
for violation of his right to due process. The amount of indemnity
being dependent on the factual circumstances of each case, 17 a
P2,000.00 award to petitioner would be appropriate.
 THIRD DIVISION
This is a Petition for Review on Certiorari under Rule 45 of the Rules
JENNIFER FABELLO G .R . No. 16 8 42 1 of Court, assailing the Decision,[1] dated 18 April 2005, rendered by
PASAMBA,
Petitioner, the Court of Appeals, affirming the Resolution,[2] promulgated by the
National Labor Relations Commission (NLRC) on 15 May 2003. The
Present:
- versus - Court of Appeals, in its assailed Decision, sustained as valid the
petitioners dismissal from her employment with St. Lukes Medical
YNARES-SANTIAGO, J.,
NATIONAL LABOR Chairperson, Center (SLMC).
RELATIONS AUSTRIA-MARTINEZ,
COMMISSION, HON. CHICO-NAZARIO, and
VICTORIANO R. NACHURA, JJ.
Petitioner Jennifer Fabello Pasamba was employed as a staff nurse
CALCAY, RAUL T.
AQUINO, ANGELITA A. by SLMC on 3 July 2001 on a probationary status for a maximum of
GACUTAN, AND LABOR
ARBITER ERNESTO S. six months. On 15 October 2001, Dr. Pacita J. M. Lopez, Assistant
DINOPOL, ST. LUKES Chairman of the Department of Pediatrics, filed a Complaint with Lydia
MEDICAL CENTER INC.,
JOSE FORTUNATO G. Promulgated: Cabigao, the Vice President for Nursing, against the petitioner for
LEDESMA, VICTORIA D. uttering slanderous remarks against her.[3] In her complaint, Dr. Lopez
VILLANUEVA, June 8, 2007
CAROLINE R. attached a letter, dated 10 October 2001, written by Hazel S. Cabales,
VALDEPENAS AND
the mother of a patient, relaying an incident wherein petitioner
JOVIE ANNE
MONSALUD, allegedly made the following remarks against Dr. Lopez[4]:
Res p on d en ts .
x-------------------------------------------------
x Bakit si Dra. Lopez pa ang napili mong pedia eh ang
tanda-tanda na nun? x x x Alam mo ba, kahit wala
namang diperensya yung baby, ipinapa-isolate
DECISION nya? Minsan nga, meron bagong baby siyang
pasyente na ipinasok dito, sabi ko, bah, himala!
Walang ikinabit sa kanya. Tapos, kinabukasan . . .
CHICO-NAZARIO, J.: kinabitan din pala!
On 16 October 2001, SLMC issued a Memorandum requiring
petitioner to reply in writing to Dr. Lopezs complaint.[5]
In a Letter,[6] dated 18 October 2001, petitioner, thru counsel, denied
making the statement, which Cabales attributed to her. Petitioner also
claimed that Cabales had merely concocted the story after petitioner
barred Cabales from staying in the Intermediate Maternity Care Unit
(IMCU), since visitors were not allowed to do so.
SLMC also conducted a hearing on 19 October 2001, wherein the
petitioner was given an opportunity to be heard and confront Cabales,
who was then present. During the hearing, petitioner stated that she
had nothing more to add to her letter, dated 18 October 2001.
Another Memorandum[7] was sent to the petitioner by SLMC on 25
October 2001, directing her to explain why disciplinary action should
not be taken against her for violating Rule IV, Article 2 of the SLMC
Code of Discipline:
a) Libelous utterances or publications which tend
to cause dishonor, discredit, contempt to the
hospital, to its employees, customers and
officers; or
b) Slanderous utterances to cause
embarrassment to the hospital, to its employees,
customers and officers.
In Reply to the 25 October 2001 memorandum, petitioner sent a
Letter[8] dated 29 October 2001 to SLMC, wherein she adopted the
explanation she gave in her letter dated 18 October 2001, and
demanded a reinvestigation.
On 7 November 2001, SLMC notified petitioner, thru a Letter,[9] that
she was found guilty of uttering slanderous and derogatory remarks
against Dr. Lopez. As a consequence, her employment with the
hospital was terminated.
On 21 December 2001, petitioner filed a Complaint for illegal dismissal
before the Labor Arbiter. In her Position Paper,[10] petitioner attached
the statements of Veronica A. Ramos and Mary Jean Parcon, both
dated 21 November 2001. In her Statement,[11] Ramos recounted an
incident wherein she advised the husband of Hazel Cabales not to
stay in the vicinity of IMCU outside visiting hours. Parcon, on the other
hand averred in her Statement[12] that in a conversation which she
overheard on 7 September 2001 between Cabales and petitioner, Dr.
Lopez was never mentioned.
Petitioner also attached a Statement[13] made by Evengeline Aguilan
Cambri commending petitioner for her professional attitude and
alleging that she never heard petitioner disparage Dr. Lopez. Further
attached were the statements made by Nayma Magallanes and
Charito Cruz, former patients whose newborn children were also
placed under the petitioners care, to the effect that they were highly
satisfied with the services of the petitioner.[14]
SLMC, on its part, presented the Employment Contract, as evidence
Petitioner filed an appeal before the NLRC, which merely
of the petitioners probationary status.[15] It also alleged that petitioner
affirmed, in a Resolution dated 15 May 2003, the decision rendered
was informed of the standards by which probationary employees are
by the Labor Arbiter on 24 April 2002.[18] Thereafter, petitioner filed a
evaluated and the rules which all employees are required to comply
Motion for Reconsideration, which was denied by the NLRC in another
with during a seminar held for this purpose. To prove this, it presented
Resolution on 12 August 2003.[19]
the attached copies of the Attendance Sheet, the evaluation form
which the petitioner filled out and a Certification, dated 3 January
On appeal, the Court of Appeals affirmed the NLRC Resolution,
2002, showing that she attended the seminar and received a copy of
dated 15 May 2003. It ruled that the SLMC dismissed the petitioner
the SLMC Code of Discipline.[16]
for failure to meet the reasonable standards for regularization when
it violated the company rule against slanderous utterances,
The Labor Arbiter dismissed the complaint and upheld the validity of
standards which were conveyed to the petitioner when she was
the petitioners termination after finding that petitioner uttered the
hired. In the decretal portion of its Decision, the Court of Appeals
slanderous remarks against Dr. Lopez. The various statements made
ruled that[20]:
in behalf of the petitioner to the effect that the affiants never heard the
petitioner utter the slanderous words were considered by the Labor WHEREFORE, premises considered, petition for
certiorari is hereby DISMISSED. ACCORDINGLY,
Arbiter as inconclusive in proving that petitioner never actually uttered the Decision dated May 15, 2003 of the NLRC
these words. Cabales, on the other hand, did not have any motive to affirming the Decision of the Labor Arbiter dated April
24, 2002 dismissing the complaint for illegal dismissal
fabricate the statements she attributed to the petitioner, whom for lack of merit, and the Order dated August 12, 2003
Cabales positively identified and confronted during the company denying petitioners motion for reconsideration, are
hereby AFFIRMED.
hearing. Thus, petitioners dismissal was based on sufficient
grounds. The Labor Arbiter ordered in its Decision, dated 24 April
Hence, the present petition, in which the following issues were
2002, that[17]:
raised[21]:
WHEREFORE, this case is hereby DISMISSED for
lack of merit. For the same reason, so are I
respondents counterclaims.
 THE HONORABLE COURT OF APPEALS
SERIOUSLY ERRED IN LAW AND SUBVERTED
ESTABLISHED JURISPRUDENCE IN NOT
FINDING THAT THERE WAS NO CAUSE FOR
DISMISSAL WHICH BY LAW IN ORDER TO BE
VALID GROUND FOR DISMISSAL MUST BE
RELATED TO HER JOB AS A STAFF NURSE.
II
THE HONORABLE COURT OF APPEALS
SERIOUSLY ERRED IN LAW AND SUBVERTED
PREVAILING JURISPRUDENCE, WHEN IT
UPHELD THE DISMISSAL, CONSIDERING THAT
THE GROUND FOR DISMISSAL THAT OF
SLANDEROUS UTTERANCES (TSISMIS), IS NOT
RELATED TO PETITIONERS JOB AS A STAFF
NURSE, HENCE NOT A JUST CAUSE FOR
DISMISSAL.
III
THE HONORABLE COURT OF APPEALS
SERIOUSLY ERRED IN LAW AND SUBVERTED
THE DOCTRINE LAID DOWN BY THE SUPREME
COURT IN BLTB VS. CIR (sic) CASE, WHEN IT
UPHELD THE DISMISSAL, NOTWITHSTANDING
THE COMPANY RULES PRESCRIBING ONLY A 30
DAYS SUSPENSION FOR ALLEGED OFFENSE OF
SLANDEROUS UTTERANCES IMPUTED TO
PETITIONER.
The petition is without merit.
The factual findings of administrative agencies are generally
held to be binding and even final as long as they are supported by
substantial evidence in the record of the case.[22] This is especially true
in this case where the Labor Arbiter, the NLRC and the Court of
Appeals are in full agreement as to the facts. No rule is more settled
than that this Court is not a trier of facts. Absent any showing that the
administrative body acted without jurisdiction or in excess of its
jurisdiction, the findings of facts shall not be disturbed.[23]
There is no reason to overturn the factual findings of the Labor
Arbiter, the NLRC and the Court of Appeals in this case, all of which
have unanimously declared that petitioner was guilty of uttering the
slanderous remarks against Dr. Lopez. The evidence on record
supports this finding.
Cabales, a disinterested person, had attested to the fact that
the petitioner made statements about Dr. Lopez that were clearly
defamatory. Cabales even appeared during the hearing held on 19
October 2001, so that petitioner could confront her. Although
petitioner was given the opportunity to question Cabales, she failed to
do so. Moreover, despite petitioners allegations to the contrary,
Cabales does not appear to have any motive to fabricate her
accusation against the petitioner.
Petitioners self-serving allegation that Cabales held a grudge
against the petitioner is unconvincing. It is unlikely that Cabales
reported the incident to Dr. Lopez simply because petitioner prohibited
Cabales from lingering within restricted premises. Petitioner, herself,
sought to prove that other nurses had prohibited Cabales and her
husband from doing the same. Yet, there is no showing that Cabales
had vengefully filed any complaint against the other nurses that
allegedly warned her off the restricted premises.
Furthermore, the positive statements of Cabales cannot be
defeated by the suspiciously evasive and indirect allegations of the
petitioners witnesses that defamatory statements against Dr. Lopez
were not made within their hearing. Such statements, even if true,
would not discount the fact that these statements were truly made,
although unheard by the witnesses.
Likewise, the statements submitted by the petitioner, made on
her behalf by former patients, commending her performance as a
nurse, do not put into question the incident related by Cabales,
wherein petitioner uttered words which were harmful to the reputation
of Dr. Lopez. Evidently, petitioner failed to present any evidence that
would sufficiently overturn the unanimous findings of the Labor Arbiter,
the NLRC and the Court of Appeals that, indeed, she made slanderous
statements against Dr. Lopez, which she addressed to a former SLMC
patient, whose newborn child was at that time confined in SLMC.
Petitioner alleges that uttering slanderous statements is not
related to her work as a nurse, and therefore cannot effect her
dismissal. To support this contention, petitioner cites the case
of Philippine Aeolus Automotive United Corporation v. National Labor
Relations Commission,[24] where the Court held that for serious
misconduct or improper behavior to warrant the dismissal of a regular
employee, the employees act must relate to the performance of the
employees duties. Petitioners theory is both unfounded and incorrect.
In the present case, petitioner was not dismissed for serious
misconduct, which is among the grounds for dismissing regular
employees enumerated under Article 282 of the Labor
Code. Petitioner was a probationary employee, not a regular
employee. A probationary employee is one, who, for a given period of
time, is being observed and evaluated to determine whether or not he
is qualified for a permanent position. A probationary appointment
affords the employer an opportunity to observe the skill, competence,
as well as the attitude of a probationer.[25] The Labor Code assigns a
separate provision, Article 281, and provides a different set of grounds
for the dismissal of probationary employees:
ART. 281. PROBATIONARY EMPLOYMENT
Probationary employment shall not exceed six (6)
months from the date the employee started working,
unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an
employee who has been engaged on a
probationary basis may be terminated for a just
cause or when he fails to qualify as a regular
employee in accordance with reasonable
standards made known by the employer to the
employee at the time of his engagement. An
employee who is allowed to work after a probationary
 period shall be considered a regular employee.
(Emphasis provided.)
The services of an employee hired on probationary basis may
be terminated when he or she fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer
to the employee at the time of his engagement. The law does not
preclude the employer from terminating the probationary employment,
if the employer finds that the probationary employee is not qualified
for regular employment.[26] As long as the termination was made for
reasons provided under Article 281 of the Labor Code before the
expiration of the six-month probationary period, the employer is well
within its rights to sever the employer-employee relationship. A
contrary interpretation would contravene the clear meaning of the term
probationary.[27] The law in protecting the rights of the laborer
authorizes neither the oppression nor the self-destruction of the
employer.[28]
The provision which states that the probationary period shall
not exceed six months means that the probationary employee may be
dismissed for cause at any time before the expiration of six months
after hiring. If, after working for less than six months, he or she is found
unfit for the job, he or she can be dismissed. On the other hand, if such
worker continues to be employed longer than six months, he or she is
considered as a regular employee and ceases to be a probationary
employee.[29]
There is no dispute that SLMC notified the petitioner of the
standards she needed to comply with for her continued
employment. The Contract of Employment[30] between SLMC and the
petitioner specifically provided for the strict compliance with SLMCs
Code of Conduct:
You will be under probation employment for a
maximum of six months, within which period SLMC will
determine your suitability for the job including your work
habits, personal characteristics and your fitness prior to
regularization. Such appointment may be terminated at
any time at the discretion of management, should you
fail to qualify as a regular employee based on SLMC
work standards.
xxxx
You are subject to strictly abide by SLMCs
Code of Discipline and its policies and procedures
formulated by the organization and all such rule and
policies as may from time to time be issued by the
organization.
You will be issued a copy of these rules and
policies at the start of your probationary
employment. (Emphasis provided.)
There is no dispute that petitioner was informed that uttering
slanderous remarks is an infraction of the rules and regulations of
SLMC. Petitioner and her co-employees, as new employees of SLMC,
attended an orientation seminar entitled, Induction to St. Lukes
Family, wherein the standards which the employees were required to
meet were discussed. Petitioners attendance was evidenced by the
Internal Customer Satisfaction Index Evaluations Form [31] and
Attendance Sheet.[32]The Certification[33] issued by SLMCs Section
Manager for Labor Relations, Luvie de los Reyes and the Department
Manager for Training Development and Education, Geraldine
Dimalibot, affirmed that the coverage of the seminar included the
provisions of the Code of Discipline. Rule IV, Article 2 of the SLMC
Code of Discipline reads:
instead of addressing these disparaging remarks to the proper
hospital officers, she addressed them to a former patient, whose child
was at that time a patient in SLMC and entrusted to the care of the
medical professional in question. An employer cannot be compelled
to retain an employee who is guilty of acts inimical to the interests of
the employer. A company has the right to dismiss employees guilty of
acts of dishonesty and disloyalty, if only as a measure of self-
protection.[34] Dismissal of an employee guilty of such a serious
infraction would be reasonable.

c) Libelous utterances or publications which tend

to cause dishonor, discredit, contempt to the Petitioner also alleges that SLMCs Code of Discipline
hospital, to its employees, customers and penalizes the offense of making slanderous utterances with a thirty-
officers; or
day suspension, and not dismissal.Such allegation would be contrary
d) Slanderous utterances to cause to basic knowledge and common sense. Petitioner, in making these
embarrassment to the hospital, to its employees,
customers and officers. slanderous utterances, violated the Code of Discipline, which
contained the standards she knew she must comply with before she
could be accorded regular status. An employer, such as SLMC,
Petitioners allegation that uttering slanderous remarks is not
cannot be compelled to continue employing a probationary employee
related to her tasks as a staff nurse deserves scant
who, as early as three months after she was hired, had shown herself
consideration. SLMC is engaged in a business whose survival is
inclined to violate the more serious of the companys rules.Petitioner
dependent on the reputation of its medical practitioners. To impute
cannot put herself on the same plane as regular employees, who have
unethical behavior and lack of professionalism to a medical
proven their suitability to their work as well as their loyalty to their
professional, to one who is also a hospital official, would be inimical to
employers, and therefore, enjoy a more secure tenure.
the interests of SLMC. This would also show tremendous disloyalty on
the part of the employee who makes such derogatory
In the case relied on by the petitioner, Batangas Laguna
statements. Moreover, the petitioners bad faith became evident when,
Tayabas Bus Co. v. Court of Appeals,[35] the Court held that the
employer cannot dismiss a regular employee for an offense to which
the companys Service Manual assigned a vague penalty. Not only
was the dismissal of the offending employee specified, the employer
also failed to comply with the requirements of procedural due
process. The aforementioned case, which involved a regular
employee who worked with the company for no less than eight years,
is certainly not applicable to the present case. Moreover, the records
clearly show that petitioner was afforded sufficient notice and
hearing. SLMC issued the Memorandum, dated 16 October 2001,
requiring the petitioner to reply to the complaint filed against
her. Thereafter, a company hearing, which petitioner attended, was
held on 19 October 2001. Lastly, SLMC notified the petitioner, thru a
letter dated 7 November 2001, that her employment was terminated
and explained the reasons therefor.

IN VIEW OF THE FOREGOING, the instant Petition

is DENIED. This Court AFFIRMS the assailed Decision of the Court
of Appeals, promulgated on 18 April 2005, declaring the dismissal of
the petitioner valid. Costs against the petitioner.

SO ORDERED.
 FIRST DIVISION
[G.R. No. 121035. April 12, 2000]
RUFINO NORBERTO F. SAMSON, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION, SCHERING-PLOUGH
CORPORATION, LEO RICONALLA and JOSE L.
ESTINGOR, respondents.
DECISION
KAPUNAN, J.:
Through this petition for certiorari, Rufino Norberto F. Samson
("petitioner") assails the Decision, dated 17 March 1995, of the
National Labor Relations Commission in the consolidated cases of
NLRC NCR-00-01-00652-94 and NLRC NCR-00-02-00887-94.
Petitioner likewise assails the Resolution, dated 10 May 1995, of the
NLRC denying his motion for reconsideration.
The assailed decision of the NLRC reversed and set aside the
Decision, dated 25 August 1994, of Labor Arbiter Ricardo C. Nora
finding respondent Schering-Plough Corporation ("respondent
company") guilty of illegal dismissal and ordering it to reinstate
petitioner to his former position as District Sales Manager and to pay
him backwages.
As culled from the decisions of the labor arbiter and the NLRC, the
facts of the case are as follows:
This pertains to the case (NCR-00-01-00652-94)
filed by the complainant Rufino Norberto F. Samson
against the respondents Schering Plough Corp.
(SPC for brevity) and Mr. Leo C. Riconalla, National
Sales Manager, for money equivalent of rice subsidy
for the period April 1990 to December 1992 and
holiday pay, now deemed submitted for resolution
based on records available.
On February 1, 1994, said complainant filed another
case (NCR-00-02-00887-94) for illegal preventive
suspension raffled to the Honorable Labor Arbiter
Donato G. Quinto, Jr. and consolidated to the above
case number.
Likewise, on February 4, 1994, complainant filed a
Motion to Amend Complaint and averred pertinently
that x x x complainant was placed under an
indefinite preventive suspension on 25 January
1994; and x x x was arbitrarily and summarily
terminated from employment on 03 February 1994
on ground of loss of confidence.
As culled from the records of the instant case, what
really precipitated complainants preventive
suspension culminating to his dismissal is (sic) the
incident that took place on December 17, 1993 as
gleaned from the exchange of letters/memoranda
from both parties.
In a letter dated 25 January 1994 (Annex A)
addressed to the complainant Mr. Samson signed by
one J.L. Estingor, the latter called the attention of
(sic) the complainants conduct x x x in a manner
inimical to the interests of SPC and enumerated the
following acts committed by the complainant; to wit:
xxxxxxxxx
1. On or about 17 December 1993, during
the Sales and Marketing Christmas
gathering, you made utterances of obscene,
insulting, and offensive words, referring to or
directed against SPCs Management
Committee, in the presence of several co-
employees.
 2. On that same occasion, and again in the
presence of several co-employees, you
uttered obscene, insulting and offensive
words, and made malicious and lewd
gestures, all of which referred to or were
directed against Mr. Epitacio D. Titong, Jr.
President and General Manager of SPC.
3. Also on that same occasion, you repeated
your malicious utterances and threatened to
disrupt or otherwise create violence during
SPCs forthcoming National Sales
Conference, and enjoined your co-
employees not to prepare for the said
conference.
4. Subsequently, on or about 3 January
1994, you repeated your threats to some co-
employees, advising them to watch out for
some disruptive actions to happen during
the National Sales Conference.
(Underscoring ours)
Complainant was given two (2) days from receipt of
the foregoing letter and to explain x x x why no
disciplinary action, including termination, should be
taken against the complainant and in the meantime
was placed on preventive suspension effective
immediately, until further notice.
Complainant on the very same date 25 January
1994 and in reply to the above-mentioned
letter/memo (Annex B) wrote an explanation stating:
xxxxxxxxx
Relative to the said memo I would like to
categorically state the following facts:
1. That the act(s) alluded in the memo,
specifically paragraph[s] 1 and 2, which
alleged that I uttered obscene, insulting and
offensive words is not true. If ever I
happened to utter such words it was made
in reference to the decision taken by the
management committee on the Cua Lim
case and not to any particular or specific
person(s) as stated in the memo.
2. I beg to disagree with the statement made
in Paragraphs 3 and 4 of the same memo as
I deny to have uttered much less threaten to
create violence and disrupt the holding of
the National Sales Conference.
Finally, I am lodging a formal protest for
being placed under preventive suspension it
being contrary to the memo which gave me
two (2) days within which to explain my
position before any disciplinary action could
be initiated. I believe that the pre-empted
imposition of the preventive suspension is
not only arbitrary but is violative of my
constitutional 'right to due process'.
Submitted for your
information.(Underscoring ours)
Again, on January 27, 1994, complainant wrote a
letter (Annex 'C') addressed to Mr. J.L. Estingor,
HRD Manager, which in part reads:
xxxxxxxxx
Being a staff (DSM) assigned in the field I
seldom stay in the office except on extreme
necessity or when my presence is required.
Under such situation my continued
 employment will not in any way poses [sic]
serious or imminent threat to the life and
property of the company as well as my co-
employees. The preventive suspension
meted out against me is not only abusive,
arbitrary but indiscriminately applied under
the guise of managerial prerogative but
violative of my right under the law.
I trust that my immediate reinstatement will
be acted upon without any further delay.
In a letter dated February 3, 1994, respondent SPC
thru Mr. J.L. Estingor, wrote a letter (Annex D) to the
complainant Mr. Samson, the dispositive part of
which reads as follows:
xxxxxxxxx
In view of the foregoing, notice is hereby
given that your employment from Schering
Plough Corporation is terminated effective at
the close of business hours of 3 February
1994.
We reiterate our previous directive for you to
turn over the service vehicle, all money,
documents, records and other property in
your possession or custody to the National
Sales Manager. Please comply with this
directive immediately."[1]
On the basis of the pleadings filed by the parties and evidence on
record, the labor arbiter rendered his Decision, dated 25 August
1994, declaring the dismissal of petitioner illegal. The labor arbiter
ruled that petitioners conduct is not so serious as to warrant his
dismissal because: 1) the alleged offensive words were uttered
during an informal and unofficial get-together of employees where
there was social drinking and petitioner was already tipsy; 2) the
words were uttered to show disapproval over managements decision
on the "Cua Lim" case; 3) the penalty for the offense is only "verbal
reminder" under respondent companys rules and regulations; and 4)
petitioner was already admonished during a meeting on 4 January
1994. Accordingly, respondent company was ordered to reinstate
petitioner as District Sales Manager and to pay him backwages. [2]
Both parties appealed said decision to the NLRC. Petitioner filed a
partial appeal of the denial of his claim for holiday pay and the cash
equivalent of the rice subsidy. For its part, respondent company
sought the reversal of the decision of the labor arbiter alleging that
the latter erred in ruling that petitioners employment was terminated
without valid cause and in ordering his reinstatement.
In reversing the labor arbiters decision, the NLRC found that there
was just cause, i.e., gross misconduct, for petitioners dismissal. The
NLRC made the following disquisition, thus:
It is well established in the records that complainant
made insulting and obscene utterances directed at
the respondent companys management committee
in the presence of several employees. Again, he
directed his verbal abuse against General Manager
and President Epitacio D. Titong, Jr. by uttering "Si
EDT, bullshit yan", "sabihin mo kay EDT yan"; and
"sabihin mo kay EDT, bullshit yan" while gesturing
and making the "dirty finger" sign. (page 7, Decision)
These utterances were made by the complainant in
[a] loud manner. (Affidavit of Leo C. Riconalla,
Annex "1", of respondents position paper) He was
further accused of threatening to disrupt
respondents national sales conference by telling Ms.
Anita Valdezco that the conference will be a "very
bloody one." (Respondents position paper)
We consider the foregoing actuations of the
complainant as constituting gross misconduct,
sufficient to justify respondents in terminating his
services. The actuation of the complainant is
 destructive of the morals of his co-employees and,
therefore, his continuance in the position of District
Sales Manager would be patently inimical to the
respondent companys interest.
Complainant is a managerial employee as he is a
District Sales Manager. As such, his position carries
the highest degree of responsibility in improving and
upholding the interests of the employer and in
exemplifying the utmost standard of discipline and
good conduct among his-co-employees. (Top Form
Mfg. Inc., vs. NLRC, 218 SCRA 313) In terminating
the employment of managerial employees, the
employer is allowed a wider latitude of discretion
than in the case of ordinary rank-and-file employee.
(Aurelio vs. NLRC, et al., G.R. 99034, April 12,
1993)[3]
Preliminarily, we find it necessary to resolve the procedural issues
raised by respondent company in its Comment (with Motion for
Clarification), dated 6 September 1995. Respondent company
harped on the fact that the caption of the petition did not include the
docket numbers of the cases before the NLRC in violation of
Supreme Court Circular 28-91. We do not find this omission fatal as
the pertinent docket numbers had been set out in the first and
second pages of the petition. The same constitutes substantial
compliance with the requirement of the law.
Respondent company further opined that the petition should be
summarily dismissed as the decision had become final and
executory citing Section 114, Rule VII and Section 2 (b), Rule VIII of
the Rules of Procedure of the NLRC. This contention is likewise
untenable. As an original action for certiorari, the petition was merely
required to be filed within a reasonable time from receipt of a copy of
the questioned decision or resolution.[4] Under the rules then in effect
at the time of the filing of the instant petition, a period of three (3)
months was considered to be "reasonable time".[5] In this case,
petitioner received a copy of the assailed NLRC decision on 25 April
1995. He filed a motion for reconsideration on 27 April 1995 but it
was denied by the NLRC in its assailed resolution, a copy of which
was received by petitioner on 1 July 1995. The instant petition was
filed twenty-seven (27) days after said receipt or on 28 July 1995.
Clearly, the instant petition was filed well within the reglementary
period provided by law.
Having settled that, we now address the substantive issue involved
in this case, i.e., whether the NLRC acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in reversing the
decision of the labor arbiter and ruling that petitioner was validly
dismissed.
We rule in favor of petitioner.
The issue of whether petitioner was validly dismissed is a factual one
and generally, factual findings of the NLRC are accorded respect. In
this case, however, there is compelling reason to deviate from this
salutary principle because the findings of facts of the NLRC are in
conflict with that of the labor arbiter. Accordingly, this Court must of
necessity review the records to determine which findings should be
preferred as more conformable to the evidentiary facts.[6]
To constitute valid dismissal, two (2) requisites must be met: (1) the
dismissal must be for any of the causes expressed in Article 282 of
the Labor Code; and (2) the employee must be given an opportunity
to be heard and defend himself.[7] Article 282 of the Labor Code
provides:
Art. 282. Termination by employer. An employer
may terminate an employment for any of the
following causes:
a. Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
b. Gross and habitual neglect by the employee of his
duties;
 c. Fraud or willful breach by the employee of the
trust reposed in him by his employer or duly
authorized representative;
d. Commission of a crime or offense by the
employee against the person of his employer or any
immediate member of his family or his duly
authorized representative; and
e. Other causes analogous to the foregoing.
As borne by the records, petitioners dismissal was brought about by
the utterances he made during an informal Christmas gathering of
respondent companys Sales and Marketing Division on 17
December 1993. Petitioner was heard to have uttered, "Si
EDT (referring to Epitacio D. Titong, General Manager and President
of respondent company), bullshit yan," "sabihin mo kay EDT yan"
and "sabihin mo kay EDT, bullshit yan," while making the "dirty
finger" gesture. Petitioner likewise told his co-employees that the
forthcoming national sales conference of respondent company would
be a "very bloody one."
The NLRC ruled that the foregoing actuation of petitioner constituted
gross misconduct warranting his dismissal. Citing jurisprudence, the
NLRC held that "in terminating the employment of managerial
employees, the employer is allowed a wider latitude of discretion
than in the case of ordinary rank-and-file."[8]
We do not agree with the findings of the NLRC.
Misconduct is improper or wrong conduct. It is the transgression of
some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent
and not mere error in judgment. The misconduct to be serious must
be of such grave and aggravated character and not merely trivial and
unimportant. Such misconduct, however serious, must, nevertheless,
be in connection with the employees work to constitute just cause for
his separation.[9]
In this case, the alleged misconduct of petitioner, when viewed in its
context, is not of such serious and grave character as to warrant his
dismissal. First, petitioner made the alleged offensive utterances and
obscene gesture during an informal Christmas gathering of
respondent companys district sales managers and marketing staff.
The gathering was just a casual get-together of employees. It is to be
expected during this kind of gatherings, where tongues are more
often than not loosened by liquor or other alcoholic beverages, that
employees freely express their grievances and gripes against their
employers. Employees should be allowed wider latitude to freely
express their sentiments during these kinds of occasions which are
beyond the disciplinary authority of the employer. Significantly, it
does not appear in the records that petitioner possessed any
ascendancy over the employees who heard his utterances as to
cause demoralization in the ranks.
Second, petitioners outburst was in reaction to the decision of the
management in the "Cua Lim" case. Admittedly, using the words
"bullshit" and "putang ina" and making lewd gesture to express his
dissatisfaction over said management decision were clearly in bad
taste but these acts were not intended to malign or cast aspersion on
the person of respondent companys president and general manager.
The instant case should be distinguished from the previous cases
where we held that the use of insulting and offensive language
constituted gross misconduct justifying an employees dismissal.
In De la Cruz vs. NLRC,[10] the dismissed employee shouted "sayang
ang pagka-professional mo!" and "putang ina mo" at the company
physician when the latter refused to give him a referral slip. In
Autobus Workers Union (AWU) vs. NLRC,[11] the dismissed
employee called his supervisor "gago ka" and taunted the latter by
saying "bakit anong gusto mo, tang ina mo." In these cases, the
dismissed employees personally subjected their respective superiors
to the foregoing verbal abuses. The utter lack of respect for their
superiors was patent. In contrast, when petitioner was heard to have
uttered the alleged offensive words against respondent companys
president and general manager, the latter was not around.
In Asian Design and Manufacturing Corporation vs. Deputy Minister
of Labor,[12] the dismissed employee made false and malicious
statements against the foreman (his superior) by telling his co-
employees: "If you dont give a goat to the foreman you will be
terminated. If you want to remain in this company, you have to give a
goat." The dismissed employee therein likewise posted a notice in
the comfort room of the company premises which read: "Notice to all
Sander - Those who want to remain in this company, you must give
anything to your foreman. Failure to do so will be terminated Alice
80." In Reynolds Philippine Corporation vs. Eslava,[13] the dismissed
employee circulated several letters to the members of the companys
board of directors calling the executive vice-president and general
manager a "big fool," "anti-Filipino" and accusing him of
"mismanagement, inefficiency, lack of planning and foresight, petty
favoritism, dictatorial policies, one-man rule, contemptuous attitude
to labor, anti-Filipino utterances and activities." In this case, the
records do not show that petitioner made any such false and
malicious statements against any of his superiors.
Third, respondent company itself did not seem to consider the
offense of petitioner serious and grave enough to warrant an
immediate investigation on the matter. It must be recalled that
petitioner uttered the alleged offensive language at an informal
gathering on 17 December 1993. He then allegedly made
threatening remarks about the forthcoming sales conference on 3
January 1994. During a meeting on 4 January 1994, Mr. Titong, Jr.,
the president and general manager of respondent company and
allegedly to whom the offensive words were directed, merely
admonished petitioner stating that, "when there is a disagreement,
act in a professional and civilized manner." Respondent company
allowed several weeks to pass before it deemed it necessary to
require petitioner to explain why no disciplinary action should be
taken against him for his behavior. This seeming lack of urgency on
the part of respondent company in taking any disciplinary action
against petitioner negates its charge that the latters misbehavior
constituted serious misconduct.
Further, respondent companys rules and regulations [14] provide as
follows:
NATURE OF THE OFFENSE
1. xxx
2. Loafing or loitering, engaging in fistcuffs or
loudmouthed quarreling or provoking or engaging
others to such behaviour, inflicting bodily harm to
another, any violent act or language which affects
adversely morals, production or the maintenance of
discipline, indecent or immoral conduct during
working hours; unauthorized participation in
activities during official hours which are outside of
regularly assigned duties: malingering; unauthorized
absence such as undertime; going on sick leave
although not actually sick; frequently receiving
visitors during official hours for personal matter.
3. Willful and intentional refusal without valid reason
to accept work or follow specific instructions;
disrespect; insolence; and like behavior towards a
superior authority of a high ranking officer of the
company.
PENALTIES
First Offense: Verbal reminder
Second Offense: Written reprimand
Third offense: Payroll deduction for time not worked
due offenses. Review with Dept. Head with written
follow up.
Fourth Offense: 2nd written reprimand with warning
of suspension
Fifth Offense: Suspension and final reprimand with
warning of dismissal if reoccurs.
Sixth Offense: Dismissal
Petitioners conduct on 17 December 1993 may be properly
considered as falling under either paragraph number 2, i.e., use of
violent language, or paragraph number 3, i.e., insolence or
disrespect towards a superior authority. Being a first offense, the
appropriate penalty imposable on petitioner is only a "verbal
reminder" and not dismissal.
Indeed, the penalty of dismissal is unduly harsh considering that
petitioner had been in the employ of respondent company for eleven
(11) years and it does not appear that he had a previous derogatory
record. It is settled that notwithstanding the existence of a valid
cause for dismissal, such as breach of trust by an employee,
nevertheless, dismissal should not be imposed, as it is too severe a
penalty if the latter had been employed for a considerable length of
time in the service of his employer, and such employment is
untainted by any kind of dishonesty and irregularity.[15]
This concern of the Court for the termination of employment even on
the assumption that conduct far from exemplary was indulged in was
made evident in the case of Almira vs. B.F. Goodrich Philippines,
Inc.,[16] where this Court held:
It would imply at the very least that where a penalty
less punitive would suffice, whatever missteps may
be committed by labor ought not to be visited with a
consequence so severe. It is not only because of the
laws concern for the workingman. There is, in
addition, his family to consider. Unemployment
brings untold hardships and sorrows on those
dependent on the wage-earner. The misery and pain
attendant on the loss of jobs then could be avoided if
there be acceptance of the view that under all
circumstances of this case, petitioners should not be
deprived of their means of livelihood. Nor is this to
condone what had been done by them. For all this
while, since private respondent considered them
separated from the service, they had not been paid.
From the strictly juridical standpoint, it cannot be too
strongly stressed, to follow Davis in his masterly
work, Discretionary Justice, that where a decision
may be made to rest on informed judgment rather
than rigid rules, all the equities of the case must be
accorded their due weight.[17]
Given the environmental circumstances of this case, the acts of
petitioner clearly do not constitute serious misconduct as to justify his
dismissal. Neither is his dismissal justified on ground of loss of
confidence. As a ground for dismissal, the term "trust and
confidence" is restricted to managerial employees.[18] We share the
view of the Solicitor General that petitioner is not a managerial
employee. Before one may be properly considered a managerial
employee, all the following conditions must be met:
(1) Their primary duty consists of the management
of the establishment in which they are employed or
of a department or sub-division thereof;
(2) They customarily and regularly direct the work of
two or more employees therein;
(3) They have the authority to hire or fire other
employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as
to the promotion or any other change of status of
other employees are given particular weight.[19]
Further, it is the nature of the employees functions, and not the
nomenclature or title given to his job, which determines whether he
has rank-and-file, supervisory or managerial status.[20] Petitioner
describes his functions as District Sales Manager as follows:
"The office of a District Sales Managers primary
responsibility is to achieve or surpass the sales and
profit targets for each territory in the assigned district
through: (a) efficient planning; (b) management
function; and (c) auditing and control. "Management
action," on the other hand, means to direct the
activities of the Professional Medical
Representatives [by]: (1) [making] decisions that are
 compatible with district, national and corporate
objectives; (2) [directing] the activities of
representative through - (a) frequent field visits
(must spend at least 80% of working days in a
quarter, allocating eight (8) working days per
PMR/quarter excluding travel time); (b) written
communications; (c) sales meetings (3) [training]
PMRs in medical/product knowledge; (4) [motivating]
and [developing] PMRs toward greater productivity;
(5) [acting] as a channel between field and home
office; (6) [maintaining] records as basis for quick
analysis of the district performance; (7) [overseeing]
special projects assuring the cost benefit value of
such benefit; (8) x x x suggesting to sales
management new ideas, methods, devices to
increase productivity of sales district or individual
properties; and [insuring] safe custody and proper
maintenance of all company properties (e.g.
company cars, audio-visuals).[21]
The above job description does not mention that petitioner
possesses the power "to lay down policies nor to hire, transfer,
suspend, lay off, recall, discharge, assign or discipline employees."
Absent this crucial element, petitioner cannot be considered a
managerial employee despite his designation as District Sales
Manager.
Granting arguendo that petitioner were to be considered a
managerial employee, the ground for "loss of confidence" is still
without basis. Loss of trust and confidence to be a valid ground for
an employees dismissal must be clearly established.[22] A breach is
willful if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must rest on substantial
grounds and not on the employers arbitrariness, whims, caprices or
suspicion, otherwise, the employee would remain at the mercy of the
employer.[23] When petitioner made the offensive utterances, it can
be said that he merely acted "carelessly, thoughtlessly or heedlessly"
and not "intentionally, knowingly, purposely, or without justifiable
excuse."
In fine, there being no just cause for petitioners dismissal, the same
is consequently unlawful. Petitioner is thus entitled to reinstatement
to his position as District Sales Manager, unless such position no
longer exists, in which case he shall be given a substantially
equivalent position without loss of seniority rights. He is likewise
entitled to the payment of his full backwages.
With respect to petitioners other monetary claims, however, we
agree with the findings of the labor arbiter that he failed to establish
his entitlement thereto. We quote with approval the labor arbiters
pertinent findings as follows:
Anent the monetary claims of complainant for
payment of the holiday pay and the cash equivalent
of the rice subsidy for the period April 1990 to
December 1992 vis-a-vis the documentary evidence
available on records (Annexes "H" and "I") this
Office is inclined to deny said claims for failure of the
complainant to substantially and convincingly prove
the same.
When complainant was appointed District Sales
Manager effective April 1, 1990, his salary was
increased by PESOS: Two Thousand Five Hundred
Only (P2,500.00) (Annex "H") in accordance with
respondents "Salary Administrative Policy".
Again, effective January 1, 1993, complainants
salary was increased by PESOS: One Thousand
One Hundred Four, so much so that in the span of
two (2) years, complainants salary reached the
amount of Twenty Thousand Five Hundred Thirty Six
(P20,536.00) Pesos which lends credence to the
position of the respondent SPC that said claims for
holiday pay and rice subsidy is already integrated in
complainants salary.[24]
WHEREFORE, the instant petition is GRANTED. The Decision,
dated 17 March 1995, and Resolution, dated 10 May 1995, of the
NLRC in the consolidated cases of NLRC NCR-00-01-00652-94 and
NLRC NCR-00-02-00887-94 are REVERSED and SET ASIDE. The
Decision, dated 25 August 1994, of the labor arbiter is
REINSTATED.

SO ORDERED.
 THIRD DIVISION The Antecedents

SUPREME STEEL PIPE G.R. No. 170811

Petitioner Supreme Steel Pipe Corporation (SSPC), a
CORPORATION and
REGAN SY, Present: domestic corporation primarily engaged in the business of
Petitioners,
YNARES-SANTIAGO, J., manufacturing steel pipes, employed respondent Rogelio Bardaje as
Chairperso
n, a warehouseman on March 14, 1994. SSPC employees were required
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR., to wear a uniform (a yellow t-shirt with a logo and the marking
CHICO-NAZARIO, and
NACHURA, JJ. Supreme) while at work.
ROGELIO BARDAJE, Promulgated:
Respondent.
April 24, 2007 On August 19, 1999, respondent reported for work at 6:45
x-------------------------------------------------
a.m. It was a common practice among warehousemen to wear long-
-x
sleeved shirts over their uniforms to serve as protection from heat and

dust while working, and on this day, respondent had on a green long-
DECISION
sleeved shirt over his uniform. Momentarily, security guard

CALLEJO, SR., J.: Christopher Barrios called him in a loud voice, and arrogantly ordered

him to remove and turn-over to him (Barrios) the long-sleeved shirt.

This a petition for review of the Decision [1] of the Court of
Appeals (CA) in CA-G.R. SP No. 81775, which reversed the July 10, Insulted and feeling singled-out from the other warehousemen who
2003 Decision[2] of the National Labor Relations Commission (NLRC) were also wearing long-sleeved shirts over their uniforms, respondent
in NLRC NCR CA No. 028936-01 and reinstated the April 30, 2001
replied: Ano ba ang gusto mo, hubarin ko o magsuntukan na lang tayo
Decision[3] of the Labor Arbiter in NCR Case No. 00-09-09800-99.
sa labas? A heated exchange of words ensued, but the brewing

scuffle between the two was averted by a co-employee from the
Production Division, Albert A. Bation. A security guard, Ricky Narciso,
was able to keep the parties apart. Barrios reported the incident to the
SSPC management.
The next day, respondent received a Memorandum from petitioner
SSPC stating that pending the investigation for his alleged violation of
the company rule prohibiting inciting a fight, harassing, coercing,
intimidating and/or threatening co-workers, he was being meted a 30-
day preventive suspension beginning August 23, 1999. [4] He was also
required to submit his Answer/Comment to the incident, to which he
readily complied.
When respondent reported back to work a month after, he was
served with a Notice dated September 8, 1999, terminating his
employment effective September 23, 1999. Petitioner SSPC had
taken into account the August 19, 1999 incident as well as
respondents previous infractions of company rules. Petitioner SSPC
declared that respondents continued employment would pose serious
and imminent threat to the lives of his co-workers and to the property
of the corporation and its employees. In part, the notice stated:
Upon thorough investigation of your case,
and the incident, there surfaced on records similar
acts which you had committed on the following
instances: 1.) August 06, 1997, you were charged
with Coercing, Intimidating and/or Threatening your
co-worker and challenged to a fight against the
Production Supervisor Engr. Benny Lloren[;]
2.) August 07, 1997, Inciting a fight inside the
Company premises against Engr. Benny Lloren;
3.) October 09, 1997, damage to Company Vehicle
thru Reckless Imprudence using Company
equipment without proper permission and authority;
4.) August 15, 1998, inflicting injury against a
Company Overseer Mr. Lim; 5.) May 24, 1999,
at 6:30 P.M., more or less, Inciting a Fight against
your co-employee Ariel Burton.
With the aforecited incident/instances [it]
would clearly manifest that your continued
employment with this Company [poses] a serious and
imminent threat to the life or property of the employer
or of your co-workers, but through your pleadings for
forgiveness with the above incidents, the Company
being considerate enough[,] you were given a second
chance.
At this instance, applying the above-stated
Rule to the [facts] obtaining in this most recent case,
[it] would inevitably result in the [finding] that
dismissal is proper. Your continued employment
would pose a serious and imminent threat to the life
or property of the Company or any of its workers.
Taking into account all the circumstances
surrounding this case, the acts which you have
showed considering your unruly temper on August
19, 1999, in the presence of the Personnel Officer
inside the Personnel Office [which] was deliberately
done to embolden yourself in a fight against another
 person[,] you would have been punished of (sic) ten percent (10%) of his total
outright dismissal. money claims;

Examination of the circumstances 6. declaring respondent Regan Sy to

surrounding your quarrel with the Guard shows [that] be held solidarily liable to
a serious or [substantial] danger has been posed by complainant for damages.
the quarrel to the well-being of your co-employees,
and your behavior threatened to cause substantial Other just and equitable reliefs are likewise prayed
prejudice for the business of the Company.[5] for.[6]

Alleging that his dismissal from service was

illegal, respondent filed a Complaint on September 29, 1999 against In their Position Paper, petitioners SSPC and Sy posited that
petitioner and its President, Regan Sy. The complaint contained the for threatening Barrios and challenging him to a fight after being
following prayer: politely advised to remove the long-sleeved shirt and wear the

WHEREFORE, complainant prays that the
Honorable Labor Arbiter render a decision:
1. declaring the dismissal of Bardaje
illegal;
2. ordering Bardaje to be reinstated
without loss of seniority rights
and with full backwages;
3. ordering respondents to pay
Bardaje TWENTY-FIVE
THOUSAND PESOS
(P25,000.00) by way of moral
damages;
4. ordering respondents to pay
Bardaje TWENTY-THOUSAND
PESOS (P20,000.00) by way of
exemplary damages;
5. ordering respondents to pay
Bardaje an amount equivalent to
uniform, respondent committed serious misconduct. Petitioners
submitted in evidence the handwritten statements of Albert Bation and
the three (3) security guards, Ricky Narciso, Ben Montoya, as well as
that of Christopher Barrios.
Petitioner SSPC reiterated that the August 19, 1999 incident
was not an isolated case; on prior occasions, the complainant had
shown his violent temper and tendency to breach company rules and
regulations given the slightest provocation, but in all the previous
offenses, the complainant was just given a kids gloves treatment. The
August 19 incident was, however, different since respondent was
challenging not only the security guards but petitioner SSPC as well.
Petitioner insisted that Barrios was only performing his job, and that
respondent should have complied with the lawful and reasonable
instructions on wearing of proper uniform instead of arrogantly
displaying his perceived superiority. They insisted that respondent
was afforded procedural due process he was duly informed of the
charges against him, and in fact submitted his explanation
thereto. Moreover, his termination was based on the evidence
presented.[7]
On April 30, 2001, the Labor Arbiter rendered judgment and
held that Bardaje was illegally dismissed. The fallo of the decision
reads:
WHEREFORE, premises considered,
judgment is entered FINDING the respondents to
have illegally dismissed complainant
thus, ORDERING them to reinstate him to his
previous position without loss [of] seniority rights and
other privileges and to pay him full backwages,
inclusive of 13th-month-pay benefits and 5-day
SILP/year, computed from date of dismissal on 23
August 1999 up to the time of his actual
reinstatement, less 3 months salary as penalty for
his infraction as shown in the attached computation
sheet by the Computation & Research Unit-this
Office.
As the reinstatement aspect is immediately
executory even pending appeal by the employer,
respondents are to admit back to work complainant
under the same terms and conditions prevailing prior
to his dismissal or at its option, merely reinstated in
the payroll.
All other claims of complainant are
dismissed for lack of merit.
SO ORDERED. [8]
The Labor Arbiter declared that respondents failed to
substantiate their claim that the complainant committed serious
misconduct. According to the Labor Arbiter, as between the
handwritten account of Montoya and complainants version that he
only wore his long-sleeved shirt when he was about to work (not at the
time he punched in his daily time record) and was shouted at, the
narration of the complainant is more worthy of belief; the guard could
not be expected to testify against his own employer. According to the
Labor Arbiter, the respondents alleged past misdemeanors should not
be considered since no investigations were conducted thereon.
However, the Labor Arbiter ruled, even if respondent was not
guilty of serious misconduct, that he was not entirely blameless. He
could have easily called the attention of his superiors to the
guards arrogant attitude. Thus, the penalty of suspension for three (3)
months without pay was proper.[9]
Petitioners appealed the case before the NLRC, alleging that
petitioner SSPC had the management prerogative to dismiss
employees as a measure of self-protection. It was claimed that the
handwritten statements of Montoya and Narciso substantially
corroborated the allegations of Barrios; considering petitioners violent
tendencies in previous incidents, he was more capable of provoking
the fight. It further claimed that the past offenses of respondent were
investigated, but for humanitarian reasons, no disciplinary actions
were imposed. They insisted that the Labor Arbiter should have
conducted trial on the merits since the resolution of the issues in the
case basically revolve on the credibility of witnesses. It further alleged
that, applying the doctrine of separate corporate entity in labor cases,
petitioner Sy should not be held liable in his personal capacity.[10]
Meantime, petitioner SSPC opted to reinstate respondent in
its payroll effective August 23, 2001, the date he actually reported
back to work.[11] However, starting June 2002, petitioner refused to
pay respondents salary. Consequently, on March 26, 2003 (while
petitioners appeal in the NLRC was pending), respondent filed a
Manifestation and Motion praying that respondent SSPC or any of its
representatives be immediately ordered to pay his salary from June
2002 up to the present.[12]
Without ruling on the motion, the NLRC rendered its July 10,
2003 Decision reversing the Decision of the Labor Arbiter, and
ordering the dismissal of the complaint.[13]
The NLRC declared that, based on the written statements of
Bation, Montoya and Narciso, the incident was not a mere exchange
of words or simple altercation; respondent was raring for a fight when
accosted for not properly wearing the company uniform. Moreover, his
propensity to incite trouble was evident from the other incidents
involving him and Engr. Benny Lloren, Ape Lim and Ariel
Burton. Hence, the August 19, 1999 incident, taken together with
respondents previous infractions, justified the imposition of the
ultimate penalty of dismissal.[14]
Respondent seasonably filed his appeal before
CA.[15] The appellate court rendered judgment on October 14,
2004 reversing the decision of the NLRC and reinstating the decision
of the Labor Arbiter. The fallo of the decision reads:
WHEREFORE, the present petition
for certiorari is GRANTED. The assailed decision and
resolution of the public respondent National Labor
Relations Commission is ANNULLED and SET
ASIDE; and the 30 April 2001 decision of Labor
Arbiter Renaldo O. Hernandez is REINSTATED.
Private respondent Supreme Steel Pipe
Corporation is further ordered to pay the salaries of
petitioner Rogelio Bardaje from June 2002, onwards.
SO ORDERED.[16]
The CA agreed with the Labor Arbiter and the NLRC that
respondent was guilty of misconduct, since he openly acknowledged
that he was engaged in a war of words that could have resulted in a
fistfight with Barrios. The CA, however, found that the penalty of
dismissal was not warranted, and that it was too harsh and evidently
disproportionate to the act committed. The NLRC patently erred and
gravely abused its discretion when it declared that the dismissal was
justified due to the previous infractions committed by respondent, as
there was no evidence that respondent was culpable therefor. Even
assuming that these were actually
committed, the CA ruled that petitioner SSPC could no longer utilize
the infractions since they had been admittedly condoned for
humanitarian considerations.[17]
Petitioners filed a motion for reconsideration, which was
the eventually denied on December 15, 2005;[18] hence, this petition.
The petition has no merit.
In this jurisdiction, we have consistently defined misconduct
as an improper or wrong conduct, a transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful
in character, implies wrongful intent and not mere error of
judgment.[19] To be a just cause for termination under Article 282 of
the Labor Code of the Philippines,[20] the misconduct must be
serious,[21] that is, it must be of such grave and aggravated character
and not merely trivial or unimportant.[22] However serious, such
misconduct must nevertheless be in connection with the employees
work;[23] the act complained of must be related to the performance of
the employees duties showing him to be unfit to continue working for
the employer.[24] Thus, for misconduct or improper behavior to be a
just cause for dismissal, (a) it must be serious; (b) it must relate to the
performance of the employees duties; and, (c) it must show that the
employee has become unfit to continue working for the employer.[25]
These guideposts were not complied with in the instant case.
Although we have recognized that fighting within company premises
may constitute serious misconduct,[26] we have also held that not
every fight within company premises in which an employee is involved
would automatically warrant dismissal from service.[27] Thus, in Sanyo
Travel Corporation v. National Labor Relations Commission,[28] Oania
v. National Labor Relations Commission,[29] and Foodmine, Inc.
(Kentucky Fried Chicken) v. National Labor Relations
Commission,[30] where the employees were dismissed for their alleged
involvement in a fight, it was ruled that the employer must prove by
substantial evidence the accusation of serious misconduct, and that in
failing to discharge the burden, the employee is deemed to have been
illegally dismissed.
Respondents actuations during the August 19, 1999 incident
were not entirely baseless. To begin with, it is certain that the verbal
tussle between him and Barrios did not start due to the alleged violent
temper and tendency to violate company rules and regulations of
respondent; the incident was primarily due to Barrios provoking
attitude. Other than the self-serving allegation of petitioner SSPC that
Barrios politely advised respondent to remove his green long-sleeved
shirt and to wear the company-issued uniform, no competent and
credible evidence was shown to support the claim. In fact, even the
handwritten statements of the three security guards, including that of
Barrios himself, did not dwell on the manner by which petitioner was
instructed. On the other hand, petitioners narrations, as corroborated
by the duly notarized affidavit of fellow warehouseman Jury
Lobitania,[31] revealed how insulting and arrogant Barrios was. This,
aside from petitioners feeling that he was being singled out from other
warehousemen, who were similarly-clothed while on duty, sufficiently
explained why he challenged Barrios to a fight.
We agree with the Labor Arbiters conclusion that respondents
misconduct on August 19, 1999 does not warrant the imposition of the
ultimate sanction of dismissal. Undeniably, the altercation between
respondent and Barrios was nipped in the bud by the timely
intervention of other employees. The momentary work stoppage did
not pose a threat to the safety or peace of mind of the workers. Neither
did such disorderly behavior cause substantial prejudice to the
business of respondent SSPC.[32]
Time and again, we have held that it is cruel and unjust to
impose the drastic penalty of dismissal if not commensurate to the
gravity of the misdeed. The reason, as this Court first enunciated
in Almira v. B.F. Goodrich Philippines, Inc.,[33] is not too difficult to
understand
xxx [W]here a penalty less punitive would suffice,
whatever missteps may be committed by labor ought
not to be visited with a consequence so severe. It is
not only because of the laws concern for the
workingman. There is, in addition, his family to
consider. Unemployment brings untold hardships and
sorrows on those dependent on the wage-earner. The
misery and pain attendant on the loss of jobs then
could be avoided if there be acceptance of the view
that under all circumstances of this case, petitioners
should not be deprived of their means of livelihood.
 Nor is this to condone what had been done by them
For all this while, since private respondent considered
them separated from the service, they had not been
paid. From the strictly juridical standpoint, it cannot be
too strongly stressed, to follow Davis in his masterly
work, Discretionary Justice, that where a decision
may be made to rest [on] informed judgment rather
than rigid rules, all the equities of the case must be
accorded their due weight. Finally, labor law
determinations, to quote from Bultmann, should be
not only secundum rationem but also secundum
caritatem.[34]
The alleged previous altercations with Engr. Benny Lloren,
Ape Lim and Ariel Burton should not be considered in the resolution
of the case. Aside from having been satisfactorily explained by
respondent,[35] they were not substantially proven and had long been
pardoned by petitioner SSPC. On this point, we agree with the
following findings of the CA:
We thoroughly examined the records before
us and found no substantial evidence to prove
petitioners alleged culpability for the above
enumerated infractions.
With respect to the infraction alleged to have been
committed on the 6th and 7th of August 1997, we find
that the Sworn Statement executed by Engr. Benny
Lloren is inadequate to prove that petitioner indeed,
incited said Lloren to a fight. Not only is the said sworn
statement uncorroborated, it is worthy to note that it
(sworn statement) was executed years after the
occurrence of the said incidents, which purportedly
took place on the 6th and 7th of August 1997. The
sworn statement of Engr. Benny Lloren was executed
on 07 January 2000.
As regards the infraction supposedly committed on 15
August 1998, while the petitioner impliedly admitted
that he inflicted physical injuries on the person of Ape
Lim, Supremes overseer, by claiming that such
physical injuries were merely inflicted in self-defense,
his (petitioner) assertion was, notably, not refuted by
the private respondents.
Anent the incident that purportedly happened on 24
May 1999, we give more credence to petitioners
contention that he did not challenge Ariel Burton to a
fight. Petitioners contention was corroborated by
Julius Constantino who executed a Sinumpaang
Salaysay, where said Julius Constantino categorically
stated that the petitioner did not challenge Ariel
Burton to a fight.
On the other hand, other than the uncorroborated
statements of Ariel Burton in his Sinumpaang
Salaysay, that the petitioner challenged him to a fight,
private respondents presented no other competent
evidence to prove petitioners alleged culpability.
Moreover, even assuming, gratia argumentis, that the
aforementioned infractions were actually committed
by the petitioner, still, private respondents, and for
that matter, the public respondent National Labor
Relations Commission, can no longer utilize said
previous
infractions of the petitioner as a justification for his
dismissal from work inasmuch as said infractions
have been admittedly condoned by the private
respondents supposedly for humanitarian
considerations. (Citations Omitted)[36]
It appears that respondent impleaded SSPC President Regan
Sy only because he is an officer/agent of the company. However,
petitioner Sy cannot be held solidarily liable with petitioner SSPC for
the termination of respondents employment, since there is no showing
that the dismissal was attended with malice or bad faith.[37]

One final note: for some unexplainable reason, the NLRC

failed to act on petitioners Manifestation and Motion praying that
petitioner SSPC or any of its representatives be immediately ordered
to pay his withheld salary beginning June 2002 up to the pendency of
the case with the Commission. It did not even mention the fact of its
filing in its Decision. While this may no
longer adversely affect respondents cause, the Court cannot let this
pass. Under Article 223 of the Labor Code,[38] an award or order of
reinstatement is self-executory.[39] The reinstatement aspect of the
Labor Arbiter's decision, albeit under appeal, is immediately
enforceable. Thus, when petitioner SSPC opted for respondents
payroll reinstatement, it should have paid his salary during the period
of appeal before the NLRC. In this case, the Commission's failure, or
refusal, to timely act on the matter is a serious oversight for which it
should be admonished. While it is incumbent upon the party to take
an active role in his case and not adopt a wait-and-see attitude, the
NLRC as an adjudicating body has the corresponding obligation to act
promptly on all incidents brought before it;[40] otherwise, the law would
readily be circumvented, causing untold hardships to the dismissed
employee.

IN LIGHT OF ALL THE FOREGOING, the instant petition

is DENIED for lack of merit. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 81775, which reinstated the April 30,
2001 Decision of the Labor Arbiter, are hereby AFFIRMED. No costs.

SO ORDERED.
 FIRST DIVISION
[G.R. No. 125548. September 25, 1998]
SOLVIC INDUSTRIAL CORP. and ANTONIO C. TAM, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION and
DIOSDADO LAUZ, respondents.
DECISION
PANGANIBAN, J.:
Except for the most serious causes affecting the business of the
employer, our labor laws frown upon the penalty of dismissal. Where
a penalty less punitive would suffice, an employee should not be
sanctioned with a consequence so severe.
The Case
Before us is a petition for certiorari under Rule 65 of the Rules of
Court, assailing the Resolutions in National Labor Relations
Commission[1] (NLRC) Case No. 00-03-02583-94, issued by the
NLRC on April 30, 1996; May 29, 1996; and June 17, 1996.
At the arbitration branch of the NLRC in the National Capital
Region, Diosdado Lauz filed on March 22, 1994, a complaint for illegal
dismissal and monetary claim for service incentive leave pay against
petitioner. On November 29, 1995, Labor Arbiter Alex Arcadio Lopez
dismissed the complaint.
On appeal, Respondent Commission set aside the Decision of
the labor arbiter. In its assailed April 30, 1996 Resolution, NLRC
ruled:[2]
PREMISES CONSIDERED, the appeal is hereby granted and the
Decision of the Labor Arbiter dated 29 November 1995 is hereby
SET ASIDE. In lieu thereof, a new Order is hereby entered directing
Solvic Industrial Corporation for [sic] the immediate reinstatement of
the complainant to his former or equivalent position without loss of
seniority right but without backwages.
Respondent Commission denied the Motion for Reconsideration
in its May 29, 1996 Resolution:[3]
WHEREFORE, the instant Motion for Reconsideration is hereby
denied for lack of merit. No further Motion of similar nature shall be
entertained.
Notwithstanding the above Resolution, petitioner filed a Second
Supplemental Motion for Reconsideration with Leave to File and Admit
the Same. The NLRC, in its third assailed Resolution dated June 17,
1996, ruled:[4]
WHEREFORE, in view of the foregoing, the instant motion is hereby
merely NOTED. Let the instant case be dropped from the calendar of
this Commission.
Attributing grave abuse of discretion to the NLRC, petitioner has
now elevated the matter to this Court.[5]
The Facts
Adopting the labor arbiters summary, Respondent NLRC relates
the factual background of this case as follows:
Complainant in his position paper alleged the following:
He started employment with respondent sometime in 1977. He
occupied the position as extruder operator. In the course of his
employment, he performed his utmost best, and in fact has never
been suspended or reprimanded. On 17 January 1994, sans cause
or due process, he was arbitrarily terminated from
service. Additionally, complainant alleged that he was not paid his
service leave pay.
Respondent on the other hand, averred that:
Complainant who was hired in 1977 was actually terminated for
cause on 17 January 1994. That the termination of complainant
arose from the incident that transpired on 17 January 1994 at about
7:00 p.m. On said occasion, complainant upon seeing Foreman
Carlos Aberin confronted him and thereafter struck him in the
shoulder beside the neck with a bladed weapon in the process,
inflicting bodily injury on him. That several days after said incident,
complainant did not report for work, hence, was issued a
memorandum of preventive suspension dated 19 January 1994,
received by him on 22 January 1994. Correspondingly, Mr. Aberin
executed an affidavit and submitted a medical certificate.
Complainant on the other hand, submitted his letter of explanation
dated 24 January 1994 denying complicity in the acts imputed to
him. Thereafter, a series of administrative investigation was
conducted on 5, 12 and 19 February 1994, where complainant
refused to give any further statement or explanation. Subsequently,
he was served his letter of termination dated 21 February 1994,
which however, he refused to receive. Relatedly, in
a meeting/conference held with the union officers by Carlos Aberin
and Diosdado Lauz on 26 February 1994, complainant admitted to
attempting to take the life of Mr. Aberin and apologized for the same.
In reply, complainant countered that he never struck Mr. Aberin with
a bladed weapon, and that the incident [was] not job related, hence
cannot serve as basis for termination.
Respondents, on the other hand in reply, argued that:
Contrary to his allegation, he was given his day in court as [an]
investigation was conducted. Moreover, complainant in the course of
his meeting with Mr. Aberin [and] with the union officers, admitted
that he assaulted the latter and even apologized in exchange for the
withdrawal of the criminal case filed against him.
The Ruling of the NLRC
Respondent Commission found that the wrong imputed to the
private respondent did not merit the penalty of dismissal. Thus,
ordering his reinstatement, but omitting the award of back wages, it
ruled:
We are not full in accord with the above-findings of the [l]abor
[a]rbiter. While we do not condone the action taken by the
complainant against his foreman, to our mind, the imposition of the
supreme penalty of dismissal is not commensurate [with] the gravity
of the offense he committed.
Records show that the injury inflicted by the complainant was not
that serious as pictured by the respondent, coupled with the fact that
the incident occurred outside the work premises and did not in any
way disrupt the operations in the company. Besides, the mere fact
that the complainant has been in the faithful service of the company
for the past twenty (20) long years untainted with any derogatory
record, are factors that must be considered in his favor. Besides, the
complainant and his supervisor had already patched up their
differences that led to the withdrawal of the criminal case instituted
by the latter against the former.
The claim for the payment of service incentive leave pay must be
denied for failure of the complainant to particularize the grounds for
his entitlement thereto. Likewise, moral damages cannot be awarded
for lack of factual or legal basis.
Assignment of Error
In its Memorandum, petitioner raises a single issue:
Whether or not the NLRC committed grave abuse of discretion in
granting the appeal of the private respondent for reinstatement, but
without backwages, finding that the penalty of dismissal was not
commensurate [with] the gravity of the offense committed by the
private respondent.[6]
In fine, petitioner questions only the propriety of private
respondents reinstatement. The parties submit no other issue.
The Courts Ruling
The appeal is devoid of merit.
Sole Issue: Reinstatement
Assailing the NLRC, petitioner contends that reinstatement is not
proper because the mere act of hacking someone with a bolo, albeit
with the blunt side, is a serious offense which merits the penalty of
dismissal. Petitioner further avers that the incident was work-related,
because it arose out of private respondents ill feelings towards his
victim, the company foreman, who had chastised him for allegedly
sleeping while on duty. Petitioner admits that the incident took place
outside the work premises, but maintains that it happened just
opposite the entrance gate of the company building.
Petitioners arguments are not persuasive. Fighting within work
premises may be deemed a valid ground for the dismissal of an
employee. Such act adversely affects the employers interests for it
distracts employees, disrupts operations and creates a hostile work
atmosphere.[7] The facts of this case, however, do not justify the
dismissal of private respondent. As found by Respondent NLRC, the
infraction was committed outside the work premises and did not lead
to any disruption of work or any hostile environment in the work
premises.
It is axiomatic that factual findings of agencies exercising quasi-
judicial functions, such as the NLRC, are accorded not only respect
but even finality, when these findings are supported by substantial
evidence.[8] A careful review of the records of this case reveals that
there is no cogent reason to overturn or modify the findings of
Respondent Commission.
We agree with the NLRC that the acts of private respondent are
not so serious as to warrant the extreme penalty of dismissal. Private
respondent was accused of hitting the victim once with the blunt side
of a bolo. Private respondent could have attacked him with the blade
of the weapon, and he could have struck him several times. But he did
not, thus negating any intent on his part to inflict fatal injuries. In fact,
the victim merely sustained a minor abrasion and has since forgiven
and reconciled with the private respondent. If the party most aggrieved
-- namely, the foreman -- has already forgiven the private respondent,
then petitioner cannot be more harsh and condemning than the
victim. Besides, no criminal or civil action has been instituted against
private respondent. Furthermore, in his twenty years of service in the
company, he has not been charged with any similar misconduct.
Arguing that the length of private respondents service cannot
atone for his serious misconduct, petitioner invokes Villeno v.
NLRC,[9] in which the Court held that considerations of first offense
and length of service are overshadowed by the seriousness of the
offense. Villeno, however, is not applicable. In that case, the
employee disconnected the steering line cable of the ship, thereby
needlessly delaying its departure. The Court recognized the gravity of
the work-related misconduct, for the concomitant delay affected the
business and the reputation of the shipping company and exposed it
to lawsuits for breach of contract. In the present case, private
respondents offense was not as serious as that in Villeno. Its
consequences did not directly affect the business of petitioner or the
atmosphere in the work premises.
Verily, we do not condone the action of the private respondent.
We believe, however, that the NLRC did not commit grave abuse of
discretion in ruling that the penalty of dismissal was too harsh and not
commensurate with the said offense. Where a penalty less punitive
would suffice, whatever missteps may be committed by labor ought
not to be visited with a consequence so severe.[10]
 Be it remembered that in an action for certiorari, the petitioner
must prove not merely reversible error, but grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the public
respondent. By grave abuse of discretion is meant capricious and
whimsical exercise of judgment as is equivalent to lack of
jurisdiction. Mere abuse of discretion is not enough. It must
be grave abuse of discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility,
and must be so patent and so gross as to amount to an evasion of a
positive duty or to a virtual refusal to perform the duty enjoined or to
act at all in contemplation of law.[11] In this case, petitioner failed to
show grave abuse of discretion on the part of Respondent
Commission.
In so ruling, we reiterate that an employers power to discipline its
workers must be exercised with caution, lest it erode the constitutional
guarantee of security of tenure.[12] This is especially true when the
penalty being imposed is dismissal, which leads to severance of
employment ties and the economic dislocation of the
employee. Because of the serious implications of this penalty, our
Labor Code decrees that an employee cannot be dismissed, except
for the most serious causes. The overly concern of our laws for the
welfare of employees is in accord with the social justice philosophy of
our Constitution.[13]
In sum, we believe Respondent Commission did not gravely
abuse its discretion in holding that private respondent should be
reinstated, but not awarded back wages. Its Decision finds basis
in Manila Electric Co. v. NLRC[14] in which the Court allowed a similar
relief.
WHEREFORE, the petition is DISMISSED and the impugned
Resolutions of Public Respondent NLRC are hereby AFFIRMED. No
costs.
SO ORDERED.
 SECOND DIVISION
(b) the Resolution of the CA promulgated

ROSARIO A. GATUS, G.R. No. 156766 on January 15, 2003, which denied the motion
Petitioner,
for reconsideration of its September 25,
Present:
2002 Decision.[3]
QUISUMBING, J., Chairperson,
- versus - CARPIO MORALES, THE FACTS
TINGA,
VELASCO, JR., and
BRION, JJ.
Petitioner Rosario A. Gatus (petitioner) started her employment as an
QUALITY HOUSE, INC.
and CHRISTOPHERCHUA, Promulgated: assembler with respondent Quality House, Inc. (respondent company)
Respondents. April 16, 2009
on July 14, 1987. The respondent company placed her under
X -------------------------------------------------------------------------------- preventive suspension on July 1, 1997 through a notice that partly
------- x
stated: In view of the incident that occurred yesterday, 30 June 1997,
DECISION
between 4:00 to 4:30 p.m. at Mapa Avenue, Sta. Mesa, Manila
BRION, J.:
involving your husband, Ferdinand Gatus, yourself and your co-

employee, Leonilo Echavez,[4] you are hereby given a preventive

Assailed before this Court via a petition for review under Rule 45 of
suspension starting today, 01 July 1997, to end on 08 July 1997,
the Rules of Court are:
pending investigation of the case.[5]
(a) the Decision of the Court of Appeals
The assailed decision narrated the June 30, 1997 incident as
(CA) promulgated on September 25,
follows:
2002[1] which reversed and set aside the
It appears that on June 30, 1997, Mr.
decision of the National Labor Relations Echavez [petitioner] and her husband and other
employees of [respondent] corporation, namely,
Commission (NLRC) promulgated on July 28, Nelia Burabo and Reynaldo Padayao, were in a
waiting shed when [petitioners] husband suddenly
1999[2]; and turned towards Echavez and mauled the latter.
 Echavez fell to the ground and sustained several
bruises, soft tissue swelling and musculoskeletal complaint on September 10, 1997, to reflect her charges of unfair
pain, as shown by a medico-legal report (Rollo, p.
65) and Echavez affidavit (Rollo, pp. 70-71). labor practice and illegal dismissal, with claims for moral and
Witnesses executed affidavits stating that private
exemplary damages.
respondent had instigated her husband by urging
him: Sige pa! sige pa! [6]
The petitioner reiterated before the labor arbiter her concerns

about her workplace difficulties. She especially bewailed the

The petitioner promptly submitted on the same date her
discrimination against her by the respondents and by supervisor
explanation in response to the respondent companys July 1,
Leonilo Echavez on account of her active participation in the formation
1997 notice.[7] She complained in Filipino that she was experiencing
of the Quality House, Inc. Workers Union (an independent labor
difficulties in her work, caused by her co-employees Shelly, Rene and
union) and her disaffiliation, together with other employees, from
Nilo Echavez, due to her trade union activities. She claimed that she
PAFLU. She reported her difficulties to her husband Ferdinand Gatus
was being harassed by the three, especially Nilo Echavez, because
(Ferdinand), who promptly confronted Echavez; the confrontation led
she did not join the Philippine Association of Free Labor Unions
to the encounter between Ferdinand and Echavez when the latter was
(PAFLU). She said she preferred to be an independent unionist. She
about to attack Ferdinand.[9]
narrated that the harassment and humiliation persisted to the point

of becoming unbearable; she was left with no recourse but to tell her
The respondents Reply narrated the infractions the petitioner
husband about her workplace problems. This made her husband mad.
committed during her employment that showed her continuing poor

work attitude, and for which she received the penalties of reprimand
The petitioner responded to the preventive suspension by filing,
and two suspensions. She was also transferred to another section
on July 7, 1997, a complaint for illegal suspension and damages
when her work attitude turned from bad to worse. The last infraction
against the respondents. In a memorandum dated July 9, 1997, the
was the June 30, 1997 incident when, at her instigation, her husband
respondent company, through Director Carmelita C. Go, terminated
Ferdinand physically attacked Leonilo Echavez. The respondent
the petitioners employment.[8] The petitioner accordingly amended her
company terminated her services when it found her explanation
unsatisfactory. The termination was effective upon her receipt of the and hearing, with instructions to rely on Article 221 of the Labor Code

respondent companys memo dated July 9, 1997.[10] if necessary.[16] On November 15, 2000, Arbiter Flores submitted a

report recommending the petitioners reinstatement, with full

Labor Arbiter Potenciano S. Caňizares, Jr. dismissed the complaint
backwages and without loss of seniority rights. The NLRC found the
for lack of merit on March 25, 1998.[11] The arbiter found no substantial
report to be supported by the facts and the law and, on this basis,
evidence that showed that the respondents committed unfair labor
reversed its earlier decision. The respondents unsuccessfully moved
practice. He likewise found that the mauling incident that occurred
for the reconsideration of the NLRCs reconsidered ruling, and
outside, but adjacent to, the respondent companys premises was
thereafter sought relief from the CA by way of a petition
instigated by petitioner; that it was a work-related matter; and that her
for certiorari and prohibition under Rule 65 of the Rules of Court.
act of bringing her husband Ferdinand to physically assault her

supervisor was worse than if she did the assault herself. The arbiter In view of the variance in the findings of fact of the labor arbiter with

concluded that the petitioners continued service with the company those of the NLRC, as well as the allegation of grave abuse of

would be inimical to the employers interest, and that her dismissal was discretion, the CA opted to review the facts of the case, as an

for a just cause under Art. 282 of the Labor Code. exception to the rule that factual findings of quasi-judicial agencies,

like the NLRC, are accorded respect and finality, if supported by

The petitioner appealed to the NLRC on April 30, 1998.[12] On July 28,
substantial evidence. On September 25, 2002, the CA promulgated
1999, the NLRC affirmed the labor arbiters ruling, finding that the
the decision assailed in the present petition, ruling that the NLRC
physical assault on Leonilo Echavez that the petitioner instigated
committed grave abuse of discretion amounting to lack of jurisdiction
constitutes a just cause for the termination of her employment. [13]
when it reinstated the petitioner and awarded her monetary benefits.

The petitioner moved for, and successfully secured, a reconsideration The petitioner filed the present petition with this Court when the CA

of the NLRCs decision.[14] The new NLRC ruling, promulgated on June denied, on January 15, 2003, the motion for reconsideration she

8, 2001,[15] referred the case to Labor Arbiter Luis D. Flores for review subsequently filed.[17]
 prove the validity of a dismissal; it is not for the employee to prove its

THE PETITION invalidity.

The petitioner further contends that the respondents failed to

The petition is anchored on the following grounds
prove that her dismissal was for a just and valid cause; thus, her

1. the CA erred in reversing and setting aside the dismissal was illegal for contravening Article 277 (b)[20] of the Labor

decision of the NLRC and reinstating that of the labor arbiter, contrary Code. She essentially questions the CAs finding that she instigated

to the evidence and settled jurisprudence. her husbands assault on her supervisor. Her alleged utterance of the

words sige pa, sige pa was never proven; even the statements of her

2. the CA erred in not resolving the doubt in the supervisor, Leonilo Echavez, regarding the incident (which the labor

evidence presented by the employee and that of the employer in favor arbiter relied upon) were inconsistent. In fact, the affidavit which

of the employee. Echavez submitted to the Office of the Prosecutor did not state that

she uttered the words sige pa, sige pa; thus, the Prosecutors Office
In a memorandum filed on August 13, 2003,[18] the petitioner claims
did not find sufficient evidence to conclude that she participated in the
that: the CA did not give any plausible or legal reason in upholding the
incident. The petitioner also claims that the CA wrongly adopted the
findings of the labor arbiter and disregarding those of the NLRC it
labor arbiters conclusion that her act of complaining to her husband
merely brushed aside the NLRCs well-founded conclusions and
about her supervisor constitutes an admission of her participation in
adopted the factual findings of the labor arbiter; and, these findings of
the assault. She alleges that it is only natural for a wife to relate to her
the labor arbiter rested solely on the respondents naked assertions
husband her workplace experiences, as she has no one to talk to
and self-serving statements, in marked contrast with the findings of
except the person closest to her heart; this communication cannot
the NLRC which are entitled to respect and finality because they are
thus be considered an act of instigation. The petitioner asserts that
supported by substantial evidence. Citing Sanyo Travel Corporation,

et al. v. NLRC, et al.,[19] the petitioner posits that the employer must
since doubts exist regarding the alleged instigation, such doubts In a memorandum filed on August 21, 2003,[21] the respondents raise

should be resolved in her favor. the following issues

The petitioner also submits that the act attributed to her does not 1. whether the petition distinctly sets forth questions of law;

pertain to the performance of her duties, and is not an act that would
2. whether the findings of fact of the CA are conclusive;
render her unfit to continue working for the company.

3. whether the appellate court erred in rendering the decisions subject

Further, the petitioner faults the CA for citing her poor work attitude as
of the petition; and
an additional basis for dismissal and as a reason that militates against

her retention in the company; she claimed that this cited reason is not 4. whether the petitioners termination from employment is valid.
true, is beside the point and an afterthought. She argues that her
On the first issue, the respondents claim that the petition is fatally
previous infractions may be used as a ground for dismissal only if they
defective because it did not raise questions of law, as required under
directly relate to the proximate cause of dismissal; this linkage was not
Rule 45 of the Rules of Court. They contend that the petition calls for
shown in the present case.
a re-evaluation and re-assessment of the evidence considered and
Lastly, the petitioner claims that she was dismissed without prior passed upon by the appellate court.
administrative investigation that allowed her to confront her accusers
The respondents see no need for the re-examination of the facts since
and the witnesses against her; she was simply placed under
the CAs findings of fact are conclusive on the Court and are supported
preventive suspension and eventually dismissed from work without
by substantial evidence.To stress that the assailed CA rulings are
any hearing.
supported by evidence, they point to the previous dismissals of the

petitioners complaint: first, by the labor arbiter in his March 25, 1998
THE CASE FOR RESPONDENTS
decision[22] in NLRC-NCR Case No. 00-07-04771-97; second, by the

NLRCs July 28, 1999 decision;[23] and third, by the CAs

decision[24] dated September 25, 2002, and resolution[25] dated We concur with the CA that there is substantial evidence to

January 15, 2003. support the conclusion that petitioner was dismissed for a just cause.

We likewise conclude that no doubt exists in the evidence presented

The respondents insist that the CA committed no error in reviewing
that would call for the application of the rule that doubts must be
the evidence presented. While the factual findings of the NLRC are
resolved in favor of the employee.[26]
generally conclusive and binding on the appellate courts, there were

conflicting factual findings by the labor arbiter and by the NLRC, which Our own reading of the evidence tells us that the assault on

necessitated a re-examination of the evidence. supervisor Leonilo Echavez on June 30, 1997[27] did indeed take place;

that the person who assaulted Echavez was Ferdinand Gatus, the

OUR RULING petitioners husband, is also beyond doubt. Thus, the real factual issue

is reduced to the petitioners connection with, or participation in, the

We find no merit in the petition. The CA correctly reversed
assault on Echavez. If she did cause, motivate or participate in the
the NLRC, thereby giving way to the labor arbiters ruling that the
attack, then the labor arbiter and the CA are correct in their conclusions;
petitioner was not illegally dismissed.
otherwise, we should uphold the NLRCs factual findings.

We find in the first place that the petitioner harbored a deep

At the outset, we clarify that the petition properly raises both
resentment against Nilo Echavez, which she reported to her husband
factual and legal questions. The variance in the factual findings below
Ferdinand. This report infuriated Ferdinand. The petitioner herself
compels us to look at the evidence to settle the factual issues
provided the basis for this conclusion when she stated in her June 30,
raised. The petition likewise raises the legal issue of whether the
1997 explanation that:
petitioner has been accorded due process. Talagang guilty si Nilo na talagang
pinahihirapan ako sa trabaho. Hindi sa nagrereklamo
The Evidentiary Issue ako; talagang sinasadya nila dahil independent ako.
Iyan ang talagang dahilan kaya nila ako ginaganun sa
trabaho. Sinabi ko kay Rene noong Sabado dahil
hindi ko na matiis ang ginagawa nila sa akin. Sabi ni
 Rene kayo ang nagsisimula eh. At saka sa trabaho
nakikita ko si Shelly, Nelia at Nilo na nagtatawanan
tapos nakatingin sa akin. Minsan nahuli ko si Nelia at
Shelly na nahihirapan na raw ako. [sic] Kaya
sinumbong ko si Nilo sa mister ko kaya nagalit.
More than providing for the motivation, the petitioner was at the
scene of the attack and actively encouraged it. Thus, the CA concluded
It is undisputed that private respondents act of
instigating her husband to inflict more violence (Sige
pa! Sige pa!) on her supervisor enraged and
emboldened him. The incident was work-related
having been brought about by respondents constant
complaints about perceived discrimination against her
in the workplace. The fact that her husband, who was
not an employee of the corporation, came to the
waiting shed at the precise time that the unsuspecting
supervisor Echavez was in the waiting shed supported
Arbiter Caňizares finding that the husband purposely
went to the companys premises to confront the
supervisor and thereafter to maul the latter.
The petitioner tried to downplay her involvement in the incident
of June 30, 1997 with her denial that she urged her husband to continue
hitting Echavez. She contended that she could not have uttered the
exhortatory remarks sige pa, sige pa at the moment her husband was
attacking Echavez, because Echavez himself did not mention it in his
affidavit before the Prosecutors Office. Echavez, however, referred to
the petitioners presence and participation in the Incident Report he filed
with the respondent company.[28] He was corroborated on this point by
two of the petitioners co-employees, Nelia Burabo and Reynaldo
Padayao, who witnessed the incident.[29] Significantly, the petitioner
had nothing to say about the corroborating statements of Burabo and
Padayao.
Under these facts, Ferdinand Gatus would not have acted as
he did in the afternoon of June 30, 1997 had petitioner not worked him
up into a sufficiently irate mood that led to the attack. In effect, petitioner
pushed her husband to get back at Echavez for what the latter had done
to her at the workplace. Beyond providing mere motivation, petitioner
was even at the scene of the attack and actively prodded her husband
to continue with the attack. This is a form of participation no less that
led the CA to conclude that
The mauling incident that resulted from the
prodding of private respondent shows her to be unfit to
continue working for her employer. Her admitted
grievances translated into the concrete act of violence
performed against her supervisor who represented her
employer. Undoubtedly, her continued employment
would cause undue strain in the workplace. Taken
lightly, the incident would inspire the breakdown of
respect and discipline among the workforce.
That the petitioners transgression merits the penalty of
dismissal is fully supported by our past rulings.[30] It is, at the very least,
a serious misconduct of a grave and aggravated character that directly
violated the personal security of another employee due to an

employment-related cause. Thus, the disciplinary measure imposed is
not a matter where the company and we should tread carefully and
show administrative leniency.
The Due Process Issue
Similarly, the CA was correct when it concluded that the
petitioner was not denied due process in the consideration of her
dismissal. The petitioner insinuated in this regard that due process
requires a formal hearing as an absolute requirement in employee
dismissals.
The pertinent provision of the Labor Code on the matter of
hearing is Article 277, which provides
ART. 277. Miscellaneous provisions. x x x (b)
Subject to the constitutional right of workers to security
of tenure and their right to be protected against
dismissal except for a just and authorized cause and
without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated
a written notice containing a statement of the causes
for termination and shall afford the latter ample
opportunity to be heard and to defend himself with the
assistance of his representative if he so desires in
accordance with company rules and regulations
promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision
taken by the employer shall be without prejudice to the
right of the worker to contest the validity or legality of
his dismissal by filing a complaint with the regional
branch of the National Labor Relations
Commission. The burden of proving that the
termination was for a valid or authorized cause shall
rest on the employer. The Secretary of the Department
of Labor may suspend the effects of the termination
pending resolution of the dispute in the event of a prima
facie finding by the appropriate official of the
Department of Labor and Employment before whom
such dispute is pending that the termination may cause
a serious labor dispute or is in implementation of a
mass lay-off.
We note and stress once more for everyones guidance that the law
itself only requires ample opportunity to be heard. The essence of
this requirement as an element of due process in administrative
proceedings is the chance to explain ones side. Jurisprudence has
amply clarified that administrative due process cannot be fully equated
with due process in the strict judicial sense,[31] and that there is no
violation of due process even if no formal or actual hearing was
conducted, provided a party is given a chance to explain his side. What
is frowned upon is the denial of the opportunity to be heard.[32] We have
decisively settled this issue in Felix B. Perez and Amante G. Doria v.
Philippine Telegraph and Telephone Company and Jose Luis
Santiago,[33] a decision penned by Mr. Justice Renato C. Corona,
where we held:
 Article 277(b) of the Labor Code provides
that, in cases of termination for a just cause, an
employee must be given ample opportunity to be
heard and to defend himself. Thus, the opportunity to
be heard afforded by law to the employee is qualified
by the word ample which ordinarily means
considerably more than adequate or sufficient. In this
regard, the phrase ample opportunity to be heard can
be reasonably interpreted as extensive enough to
cover actual hearing or conference. To this extent,
Section 2(d), Rule I of the Implementing Rules of
Book VI of the Labor Code is in conformity with Article
277(b).
Nonetheless, Section 2(d), Rule I of the
Implementing Rules of Book VI of the Labor Code
should not be taken to mean an actual hearing or
conference is a condition sine qua non for
compliance with the due process requirement in
termination of employment. The test for the fair
procedure guaranteed under Article 277(b) cannot be
whether there has been a formal pretermination
confrontation between the employer and the
employee. The ample opportunity to be heard
standard is neither synonymous nor similar to a
formal hearing. To confine the employees right to be
heard to a solitary form narrows down that right. It
deprives him of other equally effective forms of
adducing evidence in his defense.Certainly, such an
exclusivist and absolutist interpretation is overly
restrictive. The very nature of due process negates
any concept of inflexible procedures universally
applicable to every imaginable situation.
The standard for the hearing requirement,
ample opportunity, is couched in general language
revealing the legislative intent to give some degree of
flexibility or adaptability to meet the peculiarities of a
given situation. To continue it to a single rigid
filing her explanation in response to the employers July 1, 1997 memo,
proceeding such as a formal hearing will defeat its
spirit.
Significantly, Section 2(d), Rule I of the
Implementing Rules of Book VI of the Labor Code
itself provides that the so-called standards of due
process outline therein shall be
observed substantially, not strictly. This is a
recognition that while a formal hearing or conference
is ideal, it is not an absolute, mandatory or exclusive
avenue of due process.
An employees right to be heard in termination
cases under Article 277(b) as implemented by
Section 2(d), Rule I of the Implementing Rules of
Book VI of the Labor Code should be interpreted in
broad strokes. It is satisfied not only by a formal face
to face confrontation but by any meaningful
opportunity to controvert the charges against him and
to submit evidence in support thereof.
A hearing means that a party should be given
a chance to adduce his evidence to support his side
of the case and that the evidence should be taken into
account in the adjudication of the controversy. To be
heard does not mean verbal argumentation inasmuch
as one may be heard just as effectively through
written explanations, submissions or
pleadings. Therefore, while the phrase ample
opportunity to be heard may in fact include an actual
hearing, it is not limited to a formal hearing only. In
other words, the existence of an actual, formal trial
type hearing, although preferred is not absolutely
necessary to satisfy the employees right to be heard.
In the present case, we significantly note that petitioner, after
never asked for any clarificatory hearing during the plant-level and would not hesitate to disrupt the workplace and her co-employees,

proceedings. She also had ample opportunity to explain her side vis-- as she had manifested in the June 30, 1997 incident. That these

vis the principal charge against her her involvement in the incident infractions do not have direct bearing on the proximate cause for her

of June 30, 1997. It is a matter of record that the petitioner lost no time dismissal the incident of June 30, 1997 is not a valid argument, as they

in submitting the required explanation,[34] as she submitted it on the very were not in fact cited as considerations directly related to the proximate

same day that the memo was served on her.[35] The explanation, in cause; they merely served as gauges of her work attitude and her

Filipino, narrated among others the indifferent and discriminatory continued fitness to stay in the respondent company.

treatment she had been receiving from the group of Nilo Echavez,
WHEREFORE, premises considered, we DENY the petition for
which she also told her husband who got mad. Taken together with the
lack of merit. Costs against the petitioner.
testimonies of other witnesses who gave their statements on how the

petitioner encouraged her husband to attack Echavez (all of which were SO ORDERED.
duly and seasonably disclosed), the petitioner cannot claim that the

respondent company did not give her ample opportunity to be heard. All

told, we are convinced that the respondent company acted based on a

valid cause for dismissal and observed the required procedures in so

acting.

On the previous infractions that the CA cited in justifying the

petitioners dismissal,[36] we note that the CA did not dismiss the

petitioner on the basis of these previous infractions. These were cited,

more than anything else, as background and supporting information,

regarding the petitioners work attitude: she had low regard for her job
 FIRST DIVISION
G.R. No. 212054, March 11, 2015
ST. LUKE’S MEDICAL CENTER, INC., Petitioner, v. MARIA
THERESA V. SANCHEZ, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated November 21, 2013 and the Resolution3 dated April
4, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 129108
which affirmed the Decision4 dated November 19, 2012 and the
Resolution5 dated January 14, 2013 of the National Labor Relations
Commission (NLRC) in NLRC LAC No. 06-001858-12, declaring the
dismissal of respondent Maria Theresa V. Sanchez (Sanchez)
illegal.chanroblesvirtuallawlibrary
The Facts
On June 29, 2009, Sanchez was hired by petitioner St. Luke’s
Medical Center, Inc. (SLMC) as a Staff Nurse, and was eventually
assigned at SLMC, Quezon City’s Pediatric Unit until her termination
on July 6, 2011 for her purported violation of SLMC’s Code of
Discipline, particularly Section 1, Rule 1 on Acts of
Dishonesty, i.e., Robbery, Theft, Pilferage, and Misappropriation of
Funds. 6cralawred
Records reveal that at the end of her shift on May 29, 2011, Sanchez
passed through the SLMC Centralization Entrance/Exit where she
was subjected to the standard inspection procedure by the security
personnel. In the course thereof, the Security Guard on-duty, Jaime
Manzanade (SG Manzanade), noticed a pouch in her bag and
asked her to open the same.7 When opened, said pouch contained
the following assortment of medical stocks which were subsequently
confiscated: (a) Syringe 10cl [4 pieces]; (b) Syringe 5cl [3 pieces]; (c)
Syringe 3cl [3 pieces]; (d) Micropore [1 piece]; (e) Cotton Balls [1
pack]; (f) Neoflon g26 [1 piece]; (g) Venofix 25 [2 pieces]; and (h)
Gloves [4 pieces] (questioned items).8 Sanchez asked SG
Manzanade if she could just return the pouch inside the treatment
room; however, she was not allowed to do so.9 Instead, she was
brought to the SLMC In-House Security Department (IHSD) where
she was directed to write an Incident Report explaining why she had
the questioned items in her possession.10 She complied11 with the
directive and also submitted an undated handwritten letter of
apology12 (handwritten letter) which reads as
follows:chanRoblesvirtualLawlibrary
To In-House Security,
I am very sorry for bringing things from [SLMC] inside my
bag. Pasensya na po. Taos-puso po akong humihingi ng tawad sa
aking pagkakasala, Alam ko po na ako ay nagkamali. Hindi ko po
dapat dinala yung mga gamit sa hospital. Hindi ko po alam kung
[paano] ako magsisimulang humingi ng patawad. Kahit alam kong
bawal ay nagawa kong makapag uwi ng gamit. Marami pang gamit
dahil sa naipon po. Paisa-isa nagagawa kong makakuha pag
nakakalimutan kong isoli. Hindi ko na po naiwan sa nurse station
dahil naisip kong magagamit ko rin po pag minsang nagkakaubusan
ng stocks at talagang may kailangan.
Humihingi po ako ng tawad sa aking ginawa. Isinakripisyo ko ang
hindi pagiging “toxic” sa pagkuha ng gamit para sa bagay na alam
kong mali. Inaamin ko na ako’y naging madamot, pasuway at
makasalanan. Inuna ko ang comfort ko keysa gumawa ng tama.
Manikluhod po akong humihingi ng tawad.
Sorry po. Sorry po. Sorry po talaga.13cralawlawlibrary
In a memorandum14 of even date, the IHSD, Customer Affairs
Division, through Duty Officer Hernani R. Janayon, apprised SLMC
of the incident, highlighting that Sanchez expressly admitted that she
intentionally brought out the questioned items.
An initial investigation was also conducted by the SLMC Division of
Nursing15 which thereafter served Sanchez a notice to
explain.16cralawred

On May 31, 2011, Sanchez submitted an Incident Report
Addendum17 (May 31, 2011 letter), explaining that the questioned
items came from the medication drawers of patients who had already
been discharged, and, as similarly practiced by the other staff
members, she started saving these items as excess stocks in her
pouch, along with other basic items that she uses during her
shift.18 She then put the pouch inside the lowest drawer of the
bedside table in the treatment room for use in immediate procedures
in case replenishment of stocks gets delayed. However, on the day
of the incident, she failed to return the pouch inside the medication
drawer upon getting her tri-colored pen and calculator and, instead,
placed it inside her bag. Eventually, she forgot about the same as
she got caught up in work, until it was noticed by the guard on duty
on her way out of SMLC’s premises.
Consequently, Sanchez was placed under preventive suspension
effective June 3, 2011 until the conclusion of the investigation by
SLMC’s Employee and Labor Relations Department (ELRD)19 which,
thereafter, required her to explain why she should not be terminated
from service for “acts of dishonesty” due to her possession of the
questioned items in violation of Section 1, Rule I of the SLMC Code
of Discipline.20 In response, she submitted a letter21 dated June 13,
2011, which merely reiterated her claims in her previous May 31,
2011 letter. She likewise requested for a case conference,22 which
SLMC granted.23 After hearing her side, SLMC, on July 4, 2011,
informed Sanchez of its decision to terminate her employment
effective closing hours of July 6, 2011. 24 This prompted her to file a
complaint for illegal dismissal before the NLRC, docketed as NLRC
NCR Case No. 07-11042-11.
In her position paper,25 Sanchez maintained her innocence, claiming
that she had no intention of bringing outside the SLMC’s premises
the questioned items since she merely inadvertently left the pouch
containing them in her bag as she got caught up in work that day.
She further asserted that she could not be found guilty of pilferage
since the questioned items found in her possession were neither
SLMC’s nor its employees’ property. She also stressed the fact that
SLMC did not file any criminal charges against her. Anent her
supposed admission in her handwritten letter, she claimed that she
was unassisted by counsel when she executed the same and, thus,
was inadmissible for being unconstitutional.26cralawred
For its part,27 SLMC contended that Sanchez was validly dismissed
for just cause as she had committed theft in violation of Section
1,28 Rule I of the SLMC Code of Discipline,29 which punishes acts of
dishonesty, i.e., robbery, theft, pilferage, and misappropriation of
funds, with termination from service.chanroblesvirtuallawlibrary
The LA Ruling
In a Decision30 dated May 27, 2012, the Labor Arbiter (LA) ruled that
Sanchez was validly dismissed31for intentionally taking the property
of SLMC’s clients for her own personal benefit,32 which constitutes
an act of dishonesty as provided under SLMC’s Code of Discipline.
According to the LA, Sanchez’s act of theft was evinced by her
attempt to bring the questioned items that did not belong to her out of
SLMC’s premises; this was found to be analogous to serious
misconduct which is a just cause to dismiss her.33 The fact that the
items she took were neither SLMC’s nor her co-employees’ property
was not found by the LA to be material since the SLMC Code of
Discipline clearly provides that acts of dishonesty committed to
SLMC, its doctors, its employees, as well as its customers, are
punishable by a penalty of termination from service.34 To this, the LA
opined that “[i]t is rather illogical to distinguish the persons with
whom the [said] acts may be committed as SLMC is also answerable
to the properties of its patients.”35 Moreover, the LA observed that
Sanchez was aware of SLMC’s strict policy regarding the taking of
hospital/medical items as evidenced by her handwritten letter,36 but
nonetheless committed the said misconduct. Finally, the LA pointed
out that SLMC’s non-filing of a criminal case against Sanchez did not
preclude a determination of her serious misconduct, considering that
the filing of a criminal case is entirely separate and distinct from the
determination of just cause for termination of
employment.37cralawred
Aggrieved, Sanchez appealed38 to the
NLRC.chanroblesvirtuallawlibrary
 The NLRC Ruling
In a Decision39 dated November 19, 2012, the NLRC reversed and
set aside the LA ruling, and held that Sanchez was illegally
dismissed.
The NLRC declared that the alleged violation of Sanchez was a
unique case, considering that keeping excess hospital stocks or
“hoarding” was an admitted practice amongst nurses in the Pediatric
Unit which had been tolerated by SLMC management for a long
time.40 The NLRC held that while Sanchez expressed remorse for
her misconduct in her handwritten letter, she manifested that she
only “hoarded” the questioned items for future use in case their
medical supplies are depleted, and not for her personal benefit.41 It
further held that SLMC failed to establish that Sanchez was
motivated by ill-will when she brought out the questioned items,
noting: (a) the testimony of SG Manzanade during the conference
before the ELRD of Sanchez’s demeanor when she was
apprehended, i.e., “[d]i naman siya masyado nataranta,”42 and her
consequent offer to return the pouch;43 and (b) that the said pouch
was not hidden underneath the bag.44 Finally, the NLRC concluded
that the punishment of dismissal was too harsh and the one (1)
month preventive suspension already imposed on and served by
Sanchez was the appropriate penalty.45 Accordingly, the NLRC
ordered her reinstatement, and the payment of backwages, other
benefits, and attorney’s fees.46cralawred
Unconvinced, SLMC moved for reconsideration47 which was,
however, denied in a Resolution48 dated January 14, 2013. Thus, it
filed a petition for certiorari49 before the CA.ch
The CA Ruling
In a Decision50 dated November 21, 2013, the CA upheld the NLRC,
ruling that the latter did not gravely abuse its discretion in finding that
Sanchez was illegally dismissed.
It ruled that Sanchez’s offense did not qualify as serious misconduct,
given that: (a) the questioned items found in her possession were not
SLMC property since said items were paid for by discharged
patients, thus discounting any material or economic damage on
SLMC’s part; (b) the retention of excess medical supplies was an
admitted practice amongst nurses in the Pediatric Unit which was
tolerated by SLMC; (c) it was illogical for Sanchez to leave the pouch
in her bag since she would be subjected to a routine inspection; (d)
Sanchez’s lack of intention to bring out the pouch was manifested by
her composed demeanor upon apprehension and offer to return the
pouch to the treatment room; and (e) had SLMC honestly believed
that Sanchez committed theft or pilferage, it should have filed the
appropriate criminal case, but failed to do so.51 Moreover, while the
CA recognized that SLMC had the management prerogative to
discipline its erring employees, it, however, declared that such right
must be exercised humanely. As such, SLMC should only impose
penalties commensurate with the degree of infraction. Considering
that there was no indication that Sanchez’s actions were perpetrated
for self-interest or for an unlawful objective, the penalty of dismissal
imposed on her was grossly oppressive and disproportionate to her
offense.52cralawred
Dissatisfied, SLMC sought for reconsideration, 53 but was denied in a
Resolution54 dated April 4, 2014, hence, this
petition.chanroblesvirtuallawlibrary
The Issue Before the Court
The core issue to be resolved is whether or not Sanchez was illegally
dismissed by SLMC.
The Court’s Ruling
The petition is meritorious.
The right of an employer to regulate all aspects of employment, aptly
called “management prerogative,” gives employers the freedom to
regulate, according to their discretion and best judgment, all aspects
of employment, including work assignment, working
methods, processes to be followed, working regulations, transfer
of employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers.55 In this light, courts often decline to
interfere in legitimate business decisions of employers. In fact, labor
laws discourage interference in employers’ judgment concerning the
conduct of their business.56cralawred
Among the employer’s management prerogatives is the right to
prescribe reasonable rules and regulations necessary or proper for
the conduct of its business or concern, to provide certain disciplinary
measures to implement said rules and to assure that the same would
be complied with. At the same time, the employee has the corollary
duty to obey all reasonable rules, orders, and instructions of the
employer; and willful or intentional disobedience thereto, as a
general rule, justifies termination of the contract of service and the
dismissal of the employee.57 Article 296 (formerly Article 282) of the
Labor Code provides:58cralawred
Article 296. Termination by Employer. - An employer may terminate
an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or his representative in
connection with his work;
x x x xcralawlawlibrary
Note that for an employee to be validly dismissed on this ground, the
employer’s orders, regulations, or instructions must be:
(1) reasonable and lawful, (2) sufficiently known to the
employee, and (3) in connection with the duties which the
employee has been engaged to discharge.”59cralawred
Tested against the foregoing, the Court finds that Sanchez was
validly dismissed by SLMC for her willful disregard and disobedience
of Section 1, Rule I of the SLMC Code of Discipline, which
reasonably punishes acts of dishonesty, i.e., “theft, pilferage of
hospital or co-employee property, x x x or its attempt in any form or
manner from the hospital, co-employees, doctors, visitors, [and]
customers (external and internal)” with termination from
employment.60 Such act is obviously connected with Sanchez’s work,
who, as a staff nurse, is tasked with the proper stewardship of
medical supplies. Significantly, records show that Sanchez made a
categorical admission61 in her handwritten letter62 – i.e., “[k]ahit alam
kong bawal ay nagawa kong [makapag-uwi] ng gamit”63 – that
despite her knowledge of its express prohibition under the SLMC
Code of Discipline, she still knowingly brought out the subject
medical items with her. It is apt to clarify that SLMC cannot be
faulted in construing the taking of the questioned items as an act of
dishonesty (particularly, as theft, pilferage, or its attempt in any form
or manner) considering that the intent to gain may be reasonably
presumed from the furtive taking of useful property appertaining to
another.64 Note that Section 1, Rule 1 of the SLMC Code of
Discipline is further supplemented by the company policy requiring
the turn-over of excess medical supplies/items for proper
handling65 and providing a restriction on taking and bringing such
items out of the SLMC premises without the proper authorization or
“pass” from the official concerned,66 which Sanchez was equally
aware thereof.67 Nevertheless, Sanchez failed to turn-over the
questioned items and, instead, “hoarded” them, as purportedly
practiced by the other staff members in the Pediatric Unit. As it is
clear that the company policies subject of this case are reasonable
and lawful, sufficiently known to the employee, and evidently
connected with the latter’s work, the Court concludes that SLMC
dismissed Sanchez for a just cause.
On a related point, the Court observes that there lies no competent
basis to support the common observation of the NLRC and the CA
that the retention of excess medical supplies was a tolerated practice
among the nurses at the Pediatric Unit. While there were previous
incidents of “hoarding,” it appears that such acts were – in similar
fashion – furtively made and the items secretly kept, as any excess
items found in the concerned nurse’s possession would have to be
confiscated.68 Hence, the fact that no one was caught and/or
sanctioned for transgressing the prohibition therefor does not mean
that the so-called “hoarding” practice was tolerated by SLMC.
Besides, whatever maybe the justification behind the violation of the
company rules regarding excess medical supplies is immaterial since
it has been established that an infraction was deliberately
committed.69 Doubtless, the deliberate disregard or disobedience of
rules by the employee cannot be countenanced as it may encourage
him or her to do even worse and will render a mockery of the rules of
discipline that employees are required to observe. 70cralawred
Finally, the Court finds it inconsequential that SLMC has not suffered
any actual damage. While damage aggravates the charge, its
absence does not mitigate nor negate the employee’s
liability.71 Neither is SLMC’s non-filing of the appropriate criminal
charges relevant to this analysis. An employee’s guilt or innocence in
a criminal case is not determinative of the existence of a just or
authorized cause for his or her dismissal.72 It is well-settled that
conviction in a criminal case is not necessary to find just cause for
termination of employment,73 as in this case. Criminal and labor
cases involving an employee arising from the same infraction are
separate and distinct proceedings which should not arrest any
judgment from one to the other.

As it stands, the Court thus holds that the dismissal of Sanchez was
for a just cause, supported by substantial evidence, and is therefore
in order. By declaring otherwise, bereft of any substantial bases, the
NLRC issued a patently and grossly erroneous ruling tantamount to
grave abuse of discretion, which, in turn, means that the CA erred
when it affirmed the same. In consequence, the grant of the present
petition is warranted.

WHEREFORE, the petition is GRANTED. The Decision dated

November 21, 2013 and the Resolution dated April 4, 2014 of the
Court of Appeals in CA-G.R. SP No. 129108
are REVERSED and SET ASIDE. The Labor Arbiter’s Decision
dated May 27, 2012 in NLRC Case No. NCR 07-11042-11 finding
respondent Maria Theresa V. Sanchez to have been validly
dismissed by petitioner St. Luke’s Medical Center, Inc. is
hereby REINSTATED.

SO ORDERED.

\
 Republic of the Philippines
Supreme Court
Manila Petitioner Helen Valenzuela (Helen) was a production associate in

FIRST DIVISION respondent Keihin Philippines Corporation (Keihin), a company engaged in

the production of intake manifold and throttle body used in motor vehicles
NAGKAKAISANG LAKAS NG G.R. No. 171115
MANGGAGAWA SA KEIHIN manufactured by Honda.
(NLMK-OLALIA-KMU) and It is a standard operating procedure of Keihin to subject all its employees to
HELEN VALENZUELA, Present:
Petitioners, reasonable search before they leave the company premises.[4] On
CORONA, C. J., Chairperson,
September 5, 2003, while Helen was about to leave the company premises,
LEONARDO-DE CASTRO,
- versus - BERSAMIN,* she saw a packing tape near her work area and placed it inside her bag
DEL CASTILLO, and
PEREZ, JJ. because it would be useful in her transfer of residence. When the lady guard
KEIHIN PHILIPPINES on duty inspected Helens bag, she found the packing tape inside her bag.
CORPORATION, Promulgated:
Respondent. August 9, 2010 The guard confiscated it and submitted an incident report[5] dated September
x-------------------------------------------------------- 5, 2003 to the Guard-in-Charge, who, in turn, submitted a
-----------x
memorandum[6] regarding the incident to the Human Resources and
Administration Department on the same date.
DECISION

The following day, or on September 6, 2003, respondent company

DEL CASTILLO, J.:
issued a show cause notice[7] to Helen accusing her of violating F.2 of the

This Petition for Review on Certiorari[1] assails the November 2, companys Code of Conduct, which says, Any act constituting theft or

2005 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 91718 robbery, or any attempt to commit theft or robbery, of any company property

dismissing outright the petition for certiorari filed by the petitioners, as well as or other associates property. Penalty: D (dismissal).[8] Paul Cupon, Helens

its January 6, 2006 Resolution[3] denying petitioners Motion for supervisor, called her to his office and directed her to explain in writing why

Reconsideration. no disciplinary action should be taken against her.

Factual Antecedents Helen, in her explanation,[9] admitted the offense and even
manifested that she would accept whatever penalty would be imposed upon
her. She, however, did not reckon that respondent company would terminate
her services for her admitted offense.[10]
On September 26, 2003, Helen received a notice[11] of disciplinary
action informing her that Keihin has decided to terminate her services.
penalty imposed on Helen was disproportionate to the offense
committed,[16] and held that she indeed committed a serious violation of the
companys policies amounting to serious misconduct,[17] a just cause for
terminating an employee under Article 282 of the Labor Code. The Labor
Arbiter likewise upheld the right of the company to terminate Helen on the
ground of loss of confidence or breach of trust.[18]

On October 15, 2003, petitioners filed a complaint[12] against

The Labor Arbiter further held that Keihin observed the
respondent for illegal dismissal, non-payment of 13th month pay, with a
requirements of procedural due process in implementing the dismissal of
prayer for reinstatement and payment of full backwages, as well as moral
Helen.[19] He ruled that the following circumstances showed that the company
and exemplary damages. Petitioners alleged that Helens act of taking the
observed the requirements of procedural due process: a) there was a show
packing tape did not constitute serious misconduct, because the same was
cause letter informing Helen of the charge of theft and requiring her to submit
done with no malicious intent.[13] They believed that the tape was not of great
an explanation; b) there was an administrative hearing giving her an
value and of no further use to respondent company since it was already half
opportunity to be heard; and c) the respondent company furnished her with
used. Although Helen admitted that she took the packing tape, petitioners
notice of termination stating the facts of her dismissal, the offense for which
claimed that her punishment was disproportionate to her infraction.
she was found guilty, and the grounds for her dismissal.[20]

Keihin, on the other hand, maintained that Helen was guilty of

Ruling of the National Labor Relations Commission (NLRC)
serious misconduct because there was a deliberate act of stealing from the
company. Respondent company also claimed that motive and value of the
On appeal, the NLRC dismissed the appeal of the petitioners and affirmed
thing stolen are irrelevant in this case.
in toto the Decision of the Labor Arbiter. It held that petitioners admitted in
their Position Paper that Helen took the packing tape strewn on the floor near
Ruling of the Labor Arbiter
her production line within the company premises.[21] By the strength of
petitioners admission, the NLRC held that theft is a valid reason for Helens
On July 30, 2004, the Labor Arbiter[14] rendered his Decision[15] dismissing the
dismissal.[22]
complaint of illegal dismissal. He brushed aside petitioners argument that the
As to the issue of due process, the pertinent portion of the Decision[23] of the
NLRC reads:
Complainants dismissal too, was with due process.
Procedural due process only requires employers to furnish
their errant employees written notices stating the particular
acts or omissions constituting the grounds for their
dismissal and to hear their side of the story (Mendoza vs.
NLRC, 310 SCRA 846 [1999]). Complainants claim that
the show-cause letter did not pass the stringent
requirement of the law is belied by her admission in her
position paper that Mr. Cupon furnished her a form,
simultaneously asking her why she did such an act and x
x x that Mr. Cupon directed her to submit a written
explanation on the matter, which she complied with. By
Complainants own admission then, it is clear that she was
furnished a written notice informing her of the particular act
constituting the ground for her dismissal and that x x x her
side of the story [was heard]. Evidently then, Complainant
was afforded due process prior to her dismissal.
The dispositive portion of the Decision of the NLRC reads:
WHEREFORE, premises considered, Complainants
appeal is DISMISSED for lack of merit. The Labor Arbiters
assailed Decision in the above-entitled case is hereby
AFFIRMED in toto.
SO ORDERED.[24]
Ruling of the Court of Appeals
After having their Motion for Reconsideration[25] denied[26] by the NLRC, the
petitioner union, the Nagkakaisang Lakas ng Manggagawa sa Keihin, filed a
Petition for Certiorari with the CA praying that the Decision of the NLRC be
set aside. However, in a Resolution[27] dated November 2, 2005, the CA
dismissed the petition outright for not having been filed by an indispensable
party in interest under Section 2, Rule 3 of the Rules of Court.
SEC 2. Parties in interest. A real party in interest is the party
who stands to be benefited or injured by the judgment in
the suit, or the party entitled to the avails of the suit. Unless
otherwise authorized by law or these Rules, every action
must be prosecuted or defended in the name of the real
party in interest.
Petitioners filed a Motion for Reconsideration[28] but it was denied by the CA
in its Resolution[29] of January 6, 2006.
Hence, petitioners filed the present petition for review on certiorari under Rule
45, asking the Court to reverse the Resolutions of the CA and enter a new
one declaring Helens dismissal unjustified. They anchor their petition on the
following grounds:
I.
THE COURT OF APPEALS COMMITTED SERIOUS
ERROR IN HOLDING THAT THE PETITION FOR
CERTIORARI FILED BY THE UNION AND MS. HELEN
VALENZUELA WAS NOT FILED BY AN
INDISPENSABLE PARTY.
II.
THE COURT OF APPEALS COMMITTED SERIOUS
ERROR IN FAILING TO DECIDE THE CASE ON THE
MERITS DESPITE SHOWING THAT THE PETITION
FOR CERTIORARI WAS VERIFIED BY THE UNION
PRESIDENT AND MS. HELEN VALENZUELA.
 III. only between the parties themselves, but also as regards other persons who
THE COURT OF APPEALS ERRED IN FAILING TO may be affected by the judgment. A decision valid on its face cannot attain
APPRECIATE THAT SERIOUS MISCONDUCT UNDER
EXISTING LAW AND JURISPRUDENCE CANNOT BE real finality where there is want of indispensable parties.
ATTRIBUTED TO HEREIN PETITIONER HELEN
VALENZUELA BECAUSE THE DECISION OF THE
NLRC IS NOT SUPPORTED BY SUBSTANTIAL At any rate, we are aware that it is the policy of courts to encourage full
EVIDENCE.[30] adjudication of the merits of an appeal. Dismissal of appeals purely on
technical grounds, especially an appeal by a worker who was terminated and
Our Ruling
whose livelihood depends on the speedy disposition of her case, is frowned
upon. Thus, while we affirm the CAs dismissal of the petition for certiorari, we
We affirm the ruling of the CA. shall still discuss the substantive aspect of the case and go into the merits.
It is clear that petitioners failed to include the name of the dismissed
employee Helen Valenzuela in the caption of their petition for certiorari filed The petitioners argue that serious misconduct under existing law and
with the CA as well as in the body of the said petition. Instead, they only jurisprudence could not be attributed to Helen because she was not
indicated the name of the labor union Nagkakaisang Lakas ng Manggagawa motivated by malicious intent. According to petitioners, during the routine
sa Keihin (NLMK-OLALIA) as the party acting on behalf of Helen. As a result, inspection and even before the guard opened Helens bag, she readily
the CA rightly dismissed the petition based on a formal defect. admitted that the bag contained a packing tape. Petitioners claim that the
mental attitude of Helen negates depravity, willful or wrongful intent and, thus,
Under Section 7, Rule 3 of the Rules of Court, parties in interest without she cannot be held guilty of serious misconduct. Rather, it was a mere error
whom no final determination can be had of an action shall be joined as of judgment on the part of Helen. Furthermore, it was Helens honest belief
plaintiffs or defendants. If there is a failure to implead an indispensable party, that the tape she took was of no use or value and that she did not hide the
any judgment rendered would have no effectiveness.[31] It is precisely when same.
an indispensable party is not before the court (that) an action should be
dismissed. The absence of an indispensable party renders all subsequent Thus, the issue boils down to whether, in taking the packing tape for
actions of the court null and void for want of authority to act, not only as to the her own personal use, Helen committed serious misconduct, which is a just
absent parties but even to those present.[32] The purpose of the rules on cause for her dismissal from service.
joinder of indispensable parties is a complete determination of all issues not
 Article 282 of the Labor Code enumerates the just causes for
termination. It provides:
ARTICLE 282. Termination by employer. An employer
may terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his
duties;
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized representative;
and
(e) Other causes analogous to the foregoing.
Misconduct is defined as the transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment.[33] For serious
misconduct to justify dismissal under the law, (a) it must be serious, (b) must
relate to the performance of the employees duties; and (c) must show that
the employee has become unfit to continue working for the employer.[34]
In the case at bar, Helen took the packing tape with the thought that she could
use it for her own personal purposes. When Helen was asked to explain in
writing why she took the tape, she stated, Kumuha po ako ng isang packing
tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong lilipatang
bahay.[35] In other words, by her own admission, there was intent on her part
to benefit herself when she attempted to bring home the packing tape in
question.
It is noteworthy that prior to this incident, there had been several
cases of theft and vandalism involving both respondent companys property
and personal belongings of other employees. In order to address this issue
of losses, respondent company issued two memoranda implementing an
intensive inspection procedure and reminding all employees that those who
will be caught stealing and performing acts of vandalism will be dealt with in
accordance with the companys Code of Conduct. Despite these reminders,
Helen took the packing tape and was caught during the routine inspection. All
these circumstances point to the conclusion that it was not just an error of
judgment on the part of Helen, but a deliberate act of theft of company
property.
In the case of Firestone Tire and Rubber Company of the
Philippines v. Lariosa[36] involving an employee who was caught by the
security guards of the company during a routine inspection with possession
of company property, we held that:
There is no gainsaying that theft committed by an
employee constitutes a valid reason for his dismissal by the
employer. Although as a rule this Court leans over
 backwards to help workers and employees continue with
their employment or to mitigate the penalties imposed on
them, acts of dishonesty in the handling of company Regarding the requirement of procedural due process in dismissal
property are a different matter.[37]
of employees, petitioners argue that the first notice failed to explain the
charge being leveled against Helen. According to the petitioners, the notice
We hold that Helen is guilty of serious misconduct in her act of taking was vague and lacked sufficient definitiveness.
the packing tape.

The show-cause notice states:

The petitioners also argue that the penalty of dismissal is too harsh
and disproportionate to the offense committed since the value of the thing Please explain in writing within 48 hours upon receipt
hereof, why you have committed an offense against
taken is very minimal. Petitioners cite the case of Caltex Refinery Employees company property specifically F.2 of the companys Code
of Conduct: Any act constituting theft or robbery, or any
Association v. National Labor Relations Commission[38] where Arnelio M.
attempt to commit theft or robbery, of any company
Clarete (Clarete) was found to have willfully breached the trust and property or other associates property.[40]
confidence reposed in him by taking a bottle of lighter fluid. In said case, we
refrained from imposing the supreme penalty of dismissal since the
We reject petitioners claim that respondent company failed to
employee had no violations in his eight years of service and the value of the
observe the requirements of procedural due process. In the dismissal of
lighter fluid x x x is very minimal compared to his salary x x x.[39]
employees, it has been consistently held that the twin requirements of notice
and hearing are essential elements of due process. The employer must
furnish the employee with two written notices before termination of
After a closer study of both cases, we are convinced that the case
employment can be legally effected: (a) a notice apprising the employee of
of Caltex is different from the case at hand. Although both Clarete and Helen
the particular acts or omissions for which his dismissal is sought, and (b) a
had no prior violations, the former had a clean record of eight years with his
subsequent notice informing the employee of the employers decision to
employer. On the other hand, Helen was not even on her second year of
dismiss him.[41]
service with Keihin when the incident of theft occurred. And what further
In this case, respondent company furnished Helen a show-cause
distinguishes the instant case from Caltex is that respondent company was
notice dated September 6, 2003 accusing her of violating F.2 of the
dealing with several cases of theft, vandalism, and loss of company and
companys Code of Conduct which says, Any act constituting theft or robbery,
employees property when the incident involving Helen transpired.
or any attempt to commit theft or robbery, of any company property or other
associates property.[42] We find that such notice sufficiently informed Helen of
the charge of theft of company property against her. We are convinced that
such notice satisfies the due process requirement to apprise the employee
of the particular acts or omissions for which dismissal is sought.

With regard to the requirement of a hearing, the essence of due

process lies in an opportunity to be heard. Such opportunity was afforded the
petitioner when she was asked to explain her side of the story. In Metropolitan
Bank and Trust Company v. Barrientos,[43] we held that, the essence of due
process lies simply in an opportunity to be heard, and not that an actual
hearing should always and indispensably be held. Similarly in Philippine
Pasay Chung Hua Academy v. Edpan,[44] we held that, [e]ven if no hearing
or conference was conducted, the requirement of due process had been met
since he was accorded a chance to explain his side of the controversy.

WHEREFORE, the Petition is DENIED. The Resolutions dated November 2,

2005 and January 6, 2006 of the Court of Appeals in CA-G.R. SP No. 91718
are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 102993 July 14, 1995
CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA) and
ARNELIO M. CLARETE, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Third
Division), CALTEX PHILIPPINES, INC. and/or EDGARDO C.
CATAQUIS, respondents.
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules
of Court to reverse the Resolution dated August 30, 1991 of the
National Labor Relations Commission (NLRC) in NLRC Case No.
L-000063 and its Resolution dated October 15, 1991 denying the
motion for reconsideration of the decision.
I
Petitioner Arnelio M. Clarete was hired by respondent Caltex
Philippines, Inc. (Caltex) as Mechanic C on November 3, 1981.
He was later promoted to the position of Mechanic B and
assigned to the Mechanical/Metal Grades Section of respondent
Caltex's refinery in San Pascual, Batangas.
According to Clarete, at about 4:00 p.m. on April 13, 1989, on his
way to the refinery's main gate after completing a day's work at
the Maintenance Area IV, he saw on a pile of rubbish a bottle of
lighter fluid, which mechanics use to remove grease from their
hands. He picked up the bottle and placed it in the basket
attached to the handlebar of his bicycle with the intention of
asking the security guard at the gate to allow him to bring it home.
Upon reaching the gate, he took the bottle of lighter fluid from the
basket, punched out his time card at the bundy clock and then
asked Juan de Villa, the security guard on duty, permission to
take home the bottle. Replying that he was not authorized to
grant the permission sought, de Villa referred Clarete to
Dominador Castillo, the security supervisor. When so
approached, however, Castillo told Clarete to leave the bottle in
his office. Clarete complied and left for home.
Respondent Caltex gave a different version of the incident: On
said date, de Villa noticed a black bag which Clarete did not
submit for inspection. When requested by de Villa to open the
same for inspection, Clarete retorted that it was not necessary to
inspect the bag as it contained only dirty clothes. Unconvinced,
de Villa opened the bag and found a one-liter sample bottle filled
with lighter fluid surreptitiously hidden inside in the sleeves of
Clarete's working clothes, which, in turn, were covered by other
clothes. When asked if he had a gate pass to bring the bottle out
of the premises, Clarete replied that he did not secure a gate
pass as the lighter fluid was for his personal use.
On April 18, 1989, Clarete received a letter from his immediate
supervisor, requiring him to explain in writing why he should not
be subjected to disciplinary action for violation of company rules
and regulations. In his written explanation of April 20, 1989,
Clarete stated: (1) that he had no intention of bringing the bottle
of lighter fluid out of the company premises without the guard's
permission; (2) that he did seek permission but was denied; and
(3) that he left the bottle behind with the guard when told to do so.
On August 16, 1989, Clarete was charged with the crime of theft
before the Municipal Trial Court of San Pascual, Batangas
(Criminal Case No. 3331). On October 19, 1989, he received a
letter from Antonio Z. Palad, Section Head, Mechanical/Metal
Section, requiring him to explain why his services should not be
terminated for cause in view of Criminal Case No. 3331 and his
violation of the "policy on disciplinary action per G.M. Circular No.
484 of August 28, 1974, specifically '(f) Removing or attempting
to remove Company property from the Refinery without
authorization.'" (Rollo, p. 58).
In reply, Clarete requested time to consult his lawyer, which
request respondent Caltex granted on November 14, 1989.
Clarete was given up to November 30, 1989 to submit his
explanation. However, instead of submitting a written explanation,
petitioner served a letter on Palad, requesting a formal
investigation of the allegations against him, at the same time,
invoking his right to be represented by the Union and his legal
counsel. The request was granted and a hearing was scheduled
on January 5, 1990. Said hearing, as well as a subsequent one,
was however deferred upon the request of Clarete.
Believing that Clarete has been given enough time to consult his
lawyer and to prepare his explanation, a final meeting was
scheduled on February 27, 1990. At the said meeting, Clarete,
through counsel, requested a formal trial-type investigation of the
case. A letter reiterating that request was addressed by Clarete's
counsel to Palad on March 12, 1990. In his letter dated April 26,
1990, Palad denied the request on the ground that a trial-type
hearing and confrontation of witnesses were not applicable to the
company's administrative fact-finding investigation. Clarete was
then given only up to May 4, 1990 to submit his written
explanation. He finally did so on May 3, 1990.
In the meantime, on April 19, 1990, a decision was rendered in
Criminal Case No. 3331, acquitting Clarete of the crime charged
based on the insufficiency of the evidence to establish his guilt
beyond reasonable doubt.
On August 20, 1990, Clarete was informed that his services were
being terminated effective August 24, 1990 for "serious
misconduct and loss of trust and confidence resulting from your
having violated a lawful order of the Company, i.e., GM Circular
No. 484 of 8-28-74 which gave notice that the Company
considers 'removing or attempting to remove Company property
from the Refinery without authorization' to be sufficiently serious
that the erring employee be dismissed." (Rollo, p. 63). Clarete
was placed under preventive suspension with pay upon notice up
to the termination of his services on August 24, 1990.
On August 27, 1990, Clarete filed a complaint for illegal dismissal
against private respondents Caltex and/or Edgardo C. Cataquio,
in his capacity as Vice President of the Company with the
Regional Arbitration Branch IV of the National Labor Relations
Commission. On January 15, 1991, Labor Arbiter Joaquin A.
Tanodra rendered a decision, finding Clarete neither culpable of
theft nor of violating GM Circular No. 484 of August 28, 1974 as
"his purpose in going to security guard de Villa was precisely to
ask the latter's permission to bring out the lighter fluid from the
Refinery Compound." (Rollo, p. 27). He, therefore, directed the
reinstatement of Clarete with full back wages which then totaled
P40,081.60, without loss of seniority rights and other privileges.
On appeal by private respondents, NLRC rendered judgment on
August 20, 1991, vacating the decision of the Labor Arbiter and
entering a new one dismissing the complaint for lack of merit.
NLRC gave credence to the version of respondent Caltex of the
incident. It found no reason to doubt the veracity of the narration
of the security guard, who was simply doing his job of protecting
the property of private respondent and who was not shown to
hold a personal grudge or ill motive to testify falsely against
Clarete. Nonetheless, NLRC awarded Clarete financial
assistance equivalent to one month salary for every year of
service in the amount of P76,752.00.
Both parties moved for reconsideration — Clarete, on the ground
that his dismissal was without valid cause as there was no
violation of company rules, and private respondents on the
ground that Clarete was not entitled to the award of financial
assistance pursuant to the ruling in Philippine Long Distance
Telephone Company v. National Labor Relations
Commission, 164 SCRA 671 (1988).
Hence, this petition filed by Clarete and The Caltex Refinery
Employees Association, the exclusive bargaining representative
of all rank and file employees of respondent Caltex.
II
Petitioners contend that NLRC acted with grave abuse of
discretion calling for the exercise of this Court's corrective power.
They maintain that Clarete's version of the incident is more in
accord with logic and common experience. They further allege
that loss of confidence, to be valid ground for dismissal, must be
based on just and duly substantiated causes. Since Clarete's
position as mechanic is not one of trust and does not involve the
production, safekeeping or even the handling of lighter fluid, his
act of picking up the bottle of lighter fluid with the intention of
asking permission to bring it home, cannot serve as basis for loss
of confidence.
Respondent Caltex, on the other hand, asserts that G.M. Circular
No. 484 was issued pursuant to its management prerogative to
prescribe rules and regulations necessary for the conduct of its
business and specifically to put a stop to rampant pilferages of
company property by its employees, which has resulted not only
in substantial losses in its operations but also in the perceptible
breakdown in employee discipline. The findings of fact of NLRC,
which are supported by evidence on record, show that petitioner
Clarete attempted to remove a bottle of lighter fluid owned by
respondent Caltex from the company premises; therefore, Clarete
committed not only a serious misconduct but also a willful breach
of trust and confidence reposed upon him in the performance of
his duties. The loss of trust and confidence is not precluded by
the fact that Clarete's position does not require the safekeeping
or handling a lighter fluid. If this were the rule, an employee may
then help himself to his employer's property without fear of
disciplinary action as long as the property taken was not
entrusted to his care or is not related to his function.
III
The prerogative of employers to regulate all aspects of
employment subject to the limitation of special laws is recognized.
A valid exercise of management prerogative encompasses hiring,
work assignments, working methods, time, place and manner of
work, tools to be used, procedure to be followed, supervision of
workers, working regulations, transfer of employees, discipline,
dismissal and recall of workers. (San Miguel Corporation v.
Ubaldo, 218 SCRA 293 [1993]). This prerogative must, however,
be exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating the rights of the
employees granted by law or contract. (Garcia v. Manila Times,
224 SCRA 399 [1993]). There are restrictions to guide the
employers in the exercise of management prerogatives,
particularly the right to discipline or dismiss employees, for both
the Constitution and the law guarantee employees' security of
tenure. Thus, employees may be dismissed only in the manner
provided by law. (Radio Communications of the Phil., Inc. v.
National Labor Relations Commission, 223 SCRA 656 [1993]).
The right of the employer must not be exercised arbitrarily and
without just cause. Otherwise, the constitutional mandate of
security of tenure of the workers would be rendered nugatory.
(China City Restaurant Corporation v. National Labor Relations
Commission, 217 SCRA 443 [1993]).
We concur in NLRC's conclusion that the version of respondent
Caltex of the incident under consideration is more credible. As
correctly pointed out by NLRC, there is no reason to doubt the
veracity of the Report of Security Guard Juan de Villa dated April
14, 1989 and his Sinumpaang Salaysay dated April 21, 1989 as
"he simply did what he was primarily tasked to do — to protect
the company property and to apprehend misdeeds committed
thereat — neither ill motive nor personal grudge against
complainant-appellee (Clarete) was attributed to him to falsely
testify against the former" (Rollo, p. 36). Undoubtedly, the lighter
fluid is a property of private respondent and to take the same out
of its premises without the corresponding gate pass is a violation
of company rules on theft and pilferage of company property.
But while Clarete may be guilty of violation of company rules, we
find the penalty of dismissal imposed upon him by respondent
Caltex too harsh and unreasonable. As enunciated in Radio
Communications of the Philippines, Inc. v.National Labor
Relations Commission, supra, "such a penalty (of dismissal) must
be commensurate with the act, conduct or omission imputed to
the employee and imposed in connection with the employer's
disciplinary authority" (at p. 667). Even when there exist some
rules agreed upon between the employer and employee on the
subject of dismissal, we have ruled in Gelmart Industries Phils.,
Inc. v. National Labor Relations Commission, 176 SCRA 295
(1989), that the same cannot preclude the State from inquiring on
whether its rigid application would work too harshly on the
employee.
Of the same mind is the Solicitor General who, invoking Gelmart
Industries, prayed in his Manifestation, in lieu of Comment, that
the assailed decision of NLRC be set aside and reinstatement of
petitioner Clarete be ordered.
Indeed, considering that Clarete has no previous record in his
eight years of service; that the value of the lighter fluid, placed at
P8.00, is very minimal compared to his salary of P325.00 a day;
that after his dismissal, he has undergone mental torture; that
respondent Caltex did not lose anything as the bottle of lighter
fluid was retrieved on time; and that there was no showing that
Clarete's retention in the service would work undue prejudice to
the viability of employer's operations or is patently inimical to its
interest, we hold that the penalty of dismissal imposed on Clarete
is unduly harsh and grossly disproportionate to the reason for
terminating his employment. Hence, we find that the preventive
suspension imposed upon private respondent is a sufficient
penalty for the misdemeanor committed by petitioner. (Gelmart
Industries Phils., Inc. v. National Labor Relations
Commission, supra).
Since the dismissal took place on August 24, 1990, or after the
passage of R.A. No. 6715, Clarete is entitled to reinstatement
without loss of seniority rights and other privileges and his full
back wages inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. (Maranaw Hotels and Resorts Corporation v. Court
of Appeals, 215 SCRA 501 [1992]). As in the case of Pines City
v. National Labor Relations Commission, 224 SCRA 110 (1993)
and Pines City Educational Center v. National Labor Relations
Commission, 227 SCRA 655 (1993), the Court stated that in
ascertaining the total amount of back wages payable to them, we
go back to the rule prior to the Mercury Drugrule that the total
amount derived from employment elsewhere by the employee
from the date of dismissal up to the date of reinstatement, if any,
should be deducted therefrom. (Itogon-Suyoc Mines, Inc. v.
Sangilo-Itogon Workers' Union, et al., 24 SCRA 873 [1968]).
Inasmuch as petitioner received pay during his preventive
suspension, the same must also be deducted from the monetary
awards to be received by him.
WHEREFORE, the Resolution of National Labor Relations
Commission dated August 30, 1991 is REVERSED and SET
ASIDE. Respondent Caltex Phil., Inc. is ORDERED to reinstate
petitioner Clarete to his former position of Mechanic B without
loss of seniority rights and to pay him his full back wages
inclusive of allowances, and other benefits or their monetary
equivalent pursuant to Art. 279 of the Labor Code, as amended
by Section 34 of R.A. No. 6715, computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement deducting therefrom the amount received by
petitioner during his preventive suspension and any income
earned elsewhere during the period of dismissal if any. No
pronouncement as to costs.

SO ORDERED.
 SECOND DIVISION
[G.R. No. 124617. April 28, 2000]
PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION
and/or FRANCIS CHUA, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION and ROSALINDA C.
CORTEZ, respondents.
DECISION
BELLOSILLO, J.:
This petition seeks to set aside the Decision of 15 February 1996
and the Resolution of 28 March 1996 of public respondent National
Labor Relations Commission in NLRC NCR CA No. 009753-95
(NLRC NCR Case No. 00-12-08759-94) which modified the decision
of the Labor Arbiter finding petitioners not guilty of illegal dismissal.
Petitioner Philippine Aeolus Automotive United Corporation (PAAUC)
is a corporation duly organized and existing under Philippine laws,
petitioner Francis Chua is its President while private respondent
Rosalinda C. Cortez was a company nurse[1] of petitioner corporation
until her termination on 7 November 1994. Jlexj
On 5 October 1994 a memorandum was issued by Ms. Myrna
Palomares, Personnel Manager of petitioner corporation, addressed
to private respondent Rosalinda C. Cortez requiring her to explain
within forty-eight (48) hours why no disciplinary action should be
taken against her (a) for throwing a stapler at Plant Manager William
Chua, her superior, and uttering invectives against him on 2 August
1994; (b) for losing the amount of P1,488.00 entrusted to her by
Plant Manager Chua to be given to Mr. Fang of the CLMC
Department on 23 August 1994; and, (c) for asking a co-employee to
punch-in her time card thus making it appear that she was in the
office in the morning of 6 September 1994 when in fact she was not.
The memorandum however was refused by private respondent
although it was read to her and discussed with her by a co-
employee. She did not also submit the required explanation, so that
while her case was pending investigation the company placed her
under preventive suspension for thirty (30) days effective 9 October
1994 to 7 November 1994. Lexjuris
On 20 October 1994, while Cortez was still under preventive
suspension, another memorandum was issued by petitioner
corporation giving her seventy-two (72) hours to explain why no
disciplinary action should be taken against her for allegedly failing to
process the ATM applications of her nine (9) co-employees with the
Allied Banking Corporation. On 21 October 1994 private respondent
also refused to receive the second memorandum although it was
read to her by a co-employee. A copy of the memorandum was also
sent by the Personnel Manager to private respondent at her last
known address by registered mail. Jurismis
Meanwhile, private respondent submitted a written explanation with
respect to the loss of the P1,488.00 and the punching-in of her time
card by a co-employee.
On 3 November 1994 a third memorandum was issued to private
respondent, this time informing her of her termination from the
service effective 7 November 1994 on grounds of gross and habitual
neglect of duties, serious misconduct and fraud or willful breach of
trust.[2]
On 6 December 1994 private respondent filed with the Labor Arbiter
a complaint for illegal dismissal, non-payment of annual service
incentive leave pay, 13th month pay and damages against PAAUC
and its president Francis Chua.[3]
On 10 July 1995 the Labor Arbiter rendered a decision holding the
termination of Cortez as valid and legal, at the same time dismissing
her claim for damages for lack of merit.[4]
On appeal to the NLRC, public respondent reversed on 15 February
1996 the decision of the Labor Arbiter and found petitioner
corporation guilty of illegal dismissal of private respondent Cortez.
The NLRC ordered petitioner PAAUC to reinstate respondent Cortez
to her former position with back wages computed from the time of
dismissal up to her actual reinstatement.[5]
On 11 March 1996 petitioners moved for reconsideration. On 28
March 1996 the motion was denied;[6] hence, this petition
for certiorari challenging the NLRC Decision and Resolution.
The crux of the controversy may be narrowed down to two (2) main
issues: whether the NLRC gravely abused its discretion in holding as
illegal the dismissal of private respondent, and whether she is
entitled to damages in the event that the illegality of her dismissal is
sustained. Jjjuris
The Labor Code as amended provides specific grounds by which an
employer may validly terminate the services of an employee,[7] which
grounds should be strictly construed since a persons employment
constitutes "property" under the context of the constitutional
protection that "no person shall be deprived of life, liberty or property
without due process of law" and, as such, the burden of proving that
there exists a valid ground for termination of employment rests upon
the employer.[8] Likewise, in light of the employee's right to security of
tenure, where a penalty less punitive than dismissal will suffice,
whatever missteps may have been committed by labor ought not to
be visited with a consequence so severe.[9]
A perusal of the termination letter indicates that private respondent
was discharged from employment for "serious misconduct, gross and
habitual neglect of duties and fraud or willful breach of trust."
Specifically -justice
1. On August 2, 1994, you committed acts
constituting gross disrespect to your superior Mr.
William Chua, the Plant Manager.
2. On August 23, 1994, the Plant Manager entrusted
you the amount of P1,488.00 to be sent to CLMC for
Mr. Fang but the money was allegedly lost in your
possession and was not recovered.
3. On September 6, 1994, you caused someone
else to punch-in your time card to show that you
were at work when in fact you were doing a personal
errand for Richard Tan. As per time card you were in
at 8:02 A.M. but you only arrived at 12:35 P.M.
4. On July 28, 1994, you received an amount
of P900.00 from Miss Lucy Lao to open an ATM
card of nine (9) employees. On September 24, 1994,
one of the employees complained by the name of
Tirso Aquino about the status of his ATM Card and
upon query from the bank it was found out that no
application and no deposit for said person has been
made. Likewise, it was found out that you did not
open the ATM Card and deposit the P800.00 for the
8 other employees. It turned out that said deposit
was made after a month later.[10]
As to the first charge, respondent Cortez claims that as early as her
first year of employment her Plant Manager, William Chua, already
manifested a special liking for her, so much so that she was
receiving special treatment from him who would oftentimes invite her
"for a date," which she would as often refuse. On many occasions,
he would make sexual advances - touching her hands, putting his
arms around her shoulders, running his fingers on her arms and
telling her she looked beautiful. The special treatment and sexual
advances continued during her employment for four (4) years but
she never reciprocated his flirtations, until finally, she noticed that his
attitude towards her changed. He made her understand that if she
would not give in to his sexual advances he would cause her
termination from the service; and he made good his threat when he
started harassing her. She just found out one day that her table
which was equipped with telephone and intercom units and
containing her personal belongings was transferred without her
knowledge to a place with neither telephone nor intercom, for which
reason, an argument ensued when she confronted William Chua
resulting in her being charged with gross disrespect.[11]
Respondent Cortez explains, as regards the second charge, that the
money entrusted to her for transmittal was not lost; instead, she gave
it to the company personnel in-charge for proper transmittal as
evidenced by a receipt duly signed by the latter.[12]
With respect to the third imputation, private respondent admits that
she asked someone to punch-in her time card because at that time
she was doing an errand for one of the company's officers, Richard
Tan, and that was with the permission of William Chua. She
maintains that she did it in good faith believing that she was anyway
only accommodating the request of a company executive and done
for the benefit of the company with the acquiescence of her boss,
William Chua. Besides, the practice was apparently tolerated as the
employees were not getting any reprimand for doing so.[13]
As to the fourth charge regarding her alleged failure to process the
ATM cards of her co-employees, private respondent claims that she
has no knowledge thereof and therefore denies it. After all, she was
employed as a company nurse and not to process ATM cards for her
co-employees. Jksm
The Supreme Court, in a litany of decisions on serious misconduct
warranting dismissal of an employee, has ruled that for misconduct
or improper behavior to be a just cause for dismissal (a) it must be
serious; (b) must relate to the performance of the employees duties;
and, (c) must show that the employee has become unfit to continue
working for the employer.[14] The act of private respondent in
throwing a stapler and uttering abusive language upon the person of
the plant manager may be considered, from a lay man's perspective,
as a serious misconduct. However, in order to consider it a serious
misconduct that would justify dismissal under the law, it must have
been done in relation to the performance of her duties as would
show her to be unfit to continue working for her employer. The acts
complained of, under the circumstances they were done, did not in
any way pertain to her duties as a nurse. Her employment
identification card discloses the nature of her employment as a nurse
and no other.[15] Also, the memorandum informing her that she was
being preventively suspended pending investigation of her case was
addressed to her as a nurse.[16]
As regards the third alleged infraction, i.e., the act of private
respondent in asking a co-employee to punch-in her time card,
although a violation of company rules, likewise
does not constitute serious misconduct. Firstly, it was done by her in
good faith considering that she was asked by an officer to perform a
task outside the office, which was for the benefit of the company,
with the consent of the plant manager. Secondly, it was her first time
to commit such infraction during her five (5)-year service in the
company. Finally, the company did not lose anything by reason
thereof as the offense was immediately known and corrected. Es m
On alleged infraction No. 4, as may be gleaned from and admitted in
the memorandum of petitioners to private respondent dated 20
October 1994[17] and the notice of termination dated 3 November
1994, the money entrusted to her was in fact deposited in the
respective accounts of the employees concerned, although
belatedly. We agree with the submission of the Solicitor General that
-Es msc
The mere delay/failure to open an ATM account for
nine employees is not sufficient, by itself, to support
a conclusion that Rosalinda is guilty of gross and
habitual neglect of duties. First, petitioner did not
show that opening an ATM is one of her primary
duties as company nurse. Second, petitioner failed
to show that Rosalinda intentionally, knowingly, and
purposely delayed the opening of ATM accounts for
petitioners employees. It is of common knowledge
that a bank imposes upon an applicant certain
requirements before an ATM account can be
opened, i.e. properly filled up application forms,
identification cards, minimum deposit etc. In the
instant case, petitioner did not prove that the delay
was caused by Rosalindas neglect or willful act
(emphasis supplied).[18]
Gross negligence implies a want or absence of or failure to exercise
slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to
avoid them.[19] The negligence, to warrant removal from service,
should not merely be gross but also habitual. Likewise, the ground
"willful breach by the employee of the trust reposed in him by his
employer" must be founded on facts established by the employer
who must clearly and convincingly prove by substantial evidence the
facts and incidents upon which loss of confidence in the employee
may fairly be made to rest.[20] All these requirements prescribed by
law and jurisprudence are wanting in the case at bar.
On the issue of moral and exemplary damages, the NLRC ruled that
private respondent was not entitled to recover such damages for her
failure to prove that petitioner corporation had been motivated by
malice or bad faith or that it acted in a wanton, oppressive or
malevolent manner in terminating her services. In disbelieving the
explanation proffered by private respondent that the transfer of her
table was the response of a spurned lothario, public respondent
quoted the Labor Arbiter -
Complainants assertion that the cause of the
altercation between her and the Plant Manager
where she threw a stapler to him and uttered
invectives against him was her refusal to submit to
his advances to her which started from her early
days of employment and lasted for almost four
years, is hardly believable. For indeed, if there was
such harassment, why was there no complaints (sic)
from her during that period? Why did she stay there
for so long? Besides, it could not have taken that
period for the Plant Manager to react. This assertion
of the complainant deserves no credence at all.[21]
Public respondent in thus concluding appears baffled why it took
private respondent more than four (4) years to expose William
Chua's alleged sexual harassment. It reasons out that it would have
been more prepared to support her position if her act of throwing the
stapler and uttering invectives on William Chua were her immediate
reaction to his amorous overtures. In that case, according to public
respondent, she would have been justified for such outburst because
she would have been merely protecting her womanhood, her person
and her rights. Esmm is
We are not persuaded. The gravamen of the offense in sexual
harassment is not the violation of the employee's sexuality but the
abuse of power by the employer. Any employee, male or female,
may rightfully cry "foul" provided the claim is well substantiated.
Strictly speaking, there is no time period within which he or she is
expected to complain through the proper channels. The time to do so
may vary depending upon the needs, circumstances, and more
importantly, the emotional threshold of the employee.Esmso
Private respondent admittedly allowed four (4) years to pass before
finally coming out with her employer's sexual impositions. Not many
women, especially in this country, are made of the stuff that can
endure the agony and trauma of a public, even corporate, scandal. If
petitioner corporation had not issued the third memorandum that
terminated the services of private respondent, we could only
speculate how much longer she would keep her silence. Moreover,
few persons are privileged indeed to transfer from one employer to
another. The dearth of quality employment has become a daily
"monster" roaming the streets that one may not be expected to give
up one's employment easily but to hang on to it, so to speak, by all
tolerable means. Perhaps, to private respondent's mind, for as long
as she could outwit her employer's ploys she would continue on her
job and consider them as mere occupational hazards. This
uneasiness in her place of work thrived in an atmosphere of
tolerance for four (4) years, and one could only imagine the
prevailing anxiety and resentment, if not bitterness, that beset her all
that time. But William Chua faced reality soon enough. Since he had
no place in private respondent's heart, so must she have no place in
his office. So, he provoked her, harassed her, and finally dislodged
her; and for finally venting her pent-up anger for years, he "found"
the perfect reason to terminate her. Mse sm
In determining entitlement to moral and exemplary damages, we
restate the bases therefor. In moral damages, it suffices to prove that
the claimant has suffered anxiety, sleepless nights, besmirched
reputation and social humiliation by reason of the act complained
of.[22] Exemplary damages, on the other hand, are granted in addition
to, inter alia, moral damages "by way of example or correction for the
public good"[23] if the employer "acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner."[24]
Anxiety was gradual in private respondent's five (5)-year
employment. It began when her plant manager showed an obvious
partiality for her which went out of hand when he started to make it
clear that he would terminate her services if she would not give in to
his sexual advances. Sexual harassment is an imposition of
misplaced "superiority" which is enough to dampen an employee's
spirit in her capacity for advancement. It affects her sense of
judgment; it changes her life. If for this alone private respondent
should be adequately compensated. Thus, for the anxiety, the seen
and unseen hurt that she suffered, petitioners should also be made
to pay her moral damages, plus exemplary damages, for the
oppressive manner with which petitioners effected her dismissal from
the service, and to serve as a forewarning to lecherous officers and
employers who take undue advantage of their ascendancy over their
employees. Ex sm

All told, the penalty of dismissal is too excessive and not

proportionate to the alleged infractions committed considering that it
does not appear that private respondent was an incorrigible offender
or that she inflicted serious damage to the company, nor would her
continuance in the service be patently inimical to her employers
interest.[25] Even the suspension imposed upon her while her case
was pending investigation appears to be unjustified and uncalled for.

WHEREFORE, the Decision of public respondent National Labor

Relations Commssion finding the dismissal of private respondent
Rosalinda C. Cortez to be without just cause and ordering petitioners
Philippine Aeolus Automotive United Corporation and/or Francis
Chua to pay her back wages computed from the time of her
dismissal, which should be full back wages, is AFFIRMED. However,
in view of the strained relations between the adverse parties, instead
of reinstatement ordered by public respondent, petitioners should
pay private respondent separation pay equivalent to one (1) month
salary for every year of service until finality of this judgment. In
addition, petitioners are ordered to pay private
respondent P25,000.00 for moral damages and P10,000.00 for
exemplary damages. Costs against petitioners. Kyle

SO ORDERED.
 THIRD DIVISION
[G.R. No. 152329. April 22, 2003]
ALEJANDRO ROQUERO, petitioner, vs. PHILIPPINE AIRLINES,
INC., respondent.
DECISION
PUNO, J.:
Brought up on this Petition for Review is the decision of the Court
of Appeals dismissing Alejandro Roquero as an employee of the
respondent Philippine Airlines, Inc.
Roquero, along with Rene Pabayo, were ground equipment
mechanics of respondent Philippine Airlines, Inc. (PAL for brevity).
From the evidence on record, it appears that Roquero and Pabayo
were caught red-handed possessing and using Methampethamine
Hydrochloride or shabu in a raid conducted by PAL security officers
and NARCOM personnel.
The two alleged that they did not voluntarily indulge in the said
act but were instigated by a certain Jojie Alipato who was introduced
to them by Joseph Ocul, Manager of the Airport Maintenance Division
of PAL. Pabayo alleged that Alipato often bragged about the drugs he
could smuggle inside the company premises and invited other
employees to take the prohibited drugs. Alipato was unsuccessful,
until one day, he was able to persuade Pabayo to join him in taking
the drugs. They met Roquero along the way and he agreed to join
them. Inside the company premises, they locked the door and Alipato
lost no time in preparing the drugs to be used. When they started the
procedure of taking the drugs, armed men entered the room, arrested
Roquero and Pabayo and seized the drugs and the paraphernalia
used.[1] Roquero and Pabayo were subjected to a physical
examination where the results showed that they were positive of
drugs. They were also brought to the security office of PAL where they
executed written confessions without the benefit of counsel.[2]
On March 30, 1994, Roquero and Pabayo received a notice of
administrative charge[3] for violating the PAL Code of Discipline. They
were required to answer the charges and were placed under
preventive suspension.
Roquero and Pabayo, in their reply to notice of administrative
charge,[4] assailed their arrest and asserted that they were instigated
by PAL to take the drugs. They argued that Alipato was not really a
trainee of PAL but was placed in the premises to instigate the
commission of the crime. They based their argument on the fact that
Alipato was not arrested. Moreover, Alipato has no record of
employment with PAL.
In a Memorandum dated July 14, 1994, Roquero and Pabayo
were dismissed by PAL.[5] Thus, they filed a case for illegal
dismissal.[6]
In the Labor Arbiters decision, the dismissal of Roquero and
Pabayo was upheld. The Labor Arbiter found both parties at fault PAL
for applying means to entice the complainants into committing the
infraction and the complainants for giving in to the temptation and
eventually indulging in the prohibited activity. Nonetheless, the Labor
Arbiter awarded separation pay and attorneys fees to the
complainants.[7]
While the case was on appeal with the National Labor Relations
Commission (NLRC), the complainants were acquitted by the
Regional Trial Court (RTC) Branch 114, Pasay City, in the criminal
case which charged them with conspiracy for possession and use of
a regulated drug in violation of Section 16, Article III of Republic Act
6425, on the ground of instigation.
The NLRC ruled in favor of complainants as it likewise found PAL
guilty of instigation. It ordered reinstatement to their former positions
but without backwages.[8]Complainants did not appeal from the
decision but filed a motion for a writ of execution of the order of
reinstatement. The Labor Arbiter granted the motion but PAL refused
to execute the said order on the ground that they have filed a Petition
for Review before this Court.[9] In accordance with the case of St.
Martin Funeral Home vs. NLRC and Bienvenido Aricayos,[10] PALs
petition was referred to the Court of Appeals.[11]
During the pendency of the case with the Court of Appeals, PAL
and Pabayo filed a Motion to Withdraw/Dismiss the case with respect
to Pabayo, after they voluntarily entered into a compromise
agreement.[12] The motion was granted in a Resolution promulgated
by the Former Thirteenth Division of the Court of Appeals on January
29, 2002.[13]
The Court of Appeals later reversed the decision of the NLRC
and reinstated the decision of the Labor Arbiter insofar as it upheld the
dismissal of Roquero. However, it denied the award of separation pay
and attorneys fees to Roquero on the ground that one who has been
validly dismissed is not entitled to those benefits.[14]
The motion for reconsideration by Roquero was denied. In this
Petition for Review on Certiorari under Rule 45, he raises the following
issues:
1. Whether or not the instigated employee shall be solely
responsible for an action arising from the instigation
perpetrated by the employer;
2. Can the executory nature of the decision, more so the
reinstatement aspect of a labor tribunals order be
halted by a petition having been filed in higher courts
without any restraining order or preliminary
injunction having been ordered in the meantime?
3. Would the employer who refused to reinstate an
employee despite a writ duly issued be held liable to
pay the salary of the subject employee from the time
that he was ordered reinstated up to the time that
the reversed decision was handed down?[15]
I Code,[22] provide that an order of reinstatement by the Labor Arbiter is
There is no question that petitioner Roquero is guilty of serious
misconduct for possessing and using shabu. He violated Chapter 2,
Article VII, section 4 of the PAL Code of Discipline which states:
Any employee who, while on company premises or on duty, takes or
is under the influence of prohibited or controlled drugs, or
hallucinogenic substances or narcotics shall be dismissed.[16]
Serious misconduct is defined as the transgression of some
established and definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies wrongful intent and not mere error
in judgment.[17] For serious misconduct to warrant the dismissal of an
employee, it (1) must be serious; (2) must relate to the performance
of the employees duty; and (3) must show that the employee has
become unfit to continue working for the employer. [18]
It is of public knowledge that drugs can damage the mental
faculties of the user. Roquero was tasked with the repair and
maintenance of PALs airplanes. He cannot discharge that duty if he is
a drug user. His failure to do his job can mean great loss of lives and
properties. Hence, even if he was instigated to take drugs he has no
right to be reinstated to his position. He took the drugs fully knowing
that he was on duty and more so that it is prohibited by company
rules. Instigation is only a defense against criminal liability. It cannot
be used as a shield against dismissal from employment especially
when the position involves the safety of human lives.
Petitioner cannot complain he was denied procedural due
process. PAL complied with the twin-notice requirement before
dismissing the petitioner. The twin-notice rule requires (1) the notice
which apprises the employee of the particular acts or omissions for
which his dismissal is being sought along with the opportunity for the
employee to air his side, and (2) the subsequent notice of the
employers decision to dismiss him.[19] Both were given by respondent
PAL.
II
Article 223 (3rd paragraph) of the Labor Code,[20] as amended by
Section 12 of Republic Act No. 6715,[21] and Section 2 of the NLRC
Interim Rules on Appeals under RA No. 6715, Amending the Labor
immediately executory even pending appeal. The rationale of the law
has been explained in Aris (Phil.) Inc. vs. NLRC:[23]
In authorizing execution pending appeal of the reinstatement aspect
of a decision of the Labor Arbiter reinstating a dismissed or
separated employee, the law itself has laid down a compassionate
policy which, once more, vivifies and enhances the provisions of the
1987 Constitution on labor and the working man.
xxxxxxxxx
These duties and responsibilities of the State are imposed not so
much to express sympathy for the workingman as to forcefully and
meaningfully underscore labor as a primary social and economic
force, which the Constitution also expressly affirms with equal
intensity. Labor is an indispensable partner for the nations progress
and stability.
xxxxxxxxx
x x x In short, with respect to decisions reinstating employees, the
law itself has determined a sufficiently overwhelming reason for its
execution pending appeal.
xxxxxxxxx
Having failed to do so, PAL must pay Roquero the salary he is entitled
to, as if he was reinstated, from the time of the decision of the NLRC
until the finality of the decision of this Court.
We reiterate the rule that technicalities have no room in labor
cases where the Rules of Court are applied only in a suppletory
manner and only to effectuate the objectives of the Labor Code and
not to defeat them.[25] Hence, even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court. On the
other hand, if the employee has been reinstated during the appeal
period and such reinstatement order is reversed with finality, the
employee is not required to reimburse whatever salary he received for
he is entitled to such, more so if he actually rendered services during
the period.
IN VIEW WHEREOF, the dismissal of petitioner Roquero is
AFFIRMED, but respondent PAL is ordered to pay the wages to which
Roquero is entitled from the time the reinstatement order was issued
until the finality of this decision.
SO ORDERED.

x x x Then, by and pursuant to the same power (police power), the

State may authorize an immediate implementation, pending appeal,
of a decision reinstating a dismissed or separated employee since
that saving act is designed to stop, although temporarily since the
appeal may be decided in favor of the appellant, a continuing threat
or danger to the survival or even the life of the dismissed or
separated employee and his family.

The order of reinstatement is immediately executory. The

unjustified refusal of the employer to reinstate a dismissed employee
entitles him to payment of his salaries effective from the time the
employer failed to reinstate him despite the issuance of a writ of
execution.[24] Unless there is a restraining order issued, it is ministerial
upon the Labor Arbiter to implement the order of reinstatement. In the
case at bar, no restraining order was granted. Thus, it was mandatory
on PAL to actually reinstate Roquero or reinstate him in the payroll.
 Republic of the Philippines
SUPREME COURT
Baguio City
FIRST DIVISION
G.R. No. 181490 April 23, 2014
MIRANT (PHILIPPINES) CORPORATION AND EDGARDO A.
BAUTISTA, Petitioners,
vs.
JOSELITO A. CARO, Respondent.
DECISION
VILLARAMA, JR., J.:
At bar is a petition1 under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Decision2 and
Resolution3 of the Court of Appeals (CA) dated June 26, 2007
and January 11, 2008, respectively, which reversed and set aside
the Decision4 of the National Labor Relations Commission
(NLRC) in NLRC NCR CA No. 046551-05 (NCR-00-03-02511-
05). The NLRC decision vacated and set aside the Decision5 of
the Labor Arbiter which found that respondent Joselito A. Caro
(Caro) was illegally dismissed by petitioner Mirant (Philippines)
Corporation (Mirant).
Petitioner corporation is organized and operating under and by
virtue of the laws of the Republic of the Philippines. It is a holding
company that owns shares in project companies such as Mirant
Sual Corporation and Mirant Pagbilao Corporation (Mirant
Pagbilao) which operate and maintain power stations located in
Sual, Pangasinan and Pagbilao, Quezon, respectively. Petitioner
corporation and its related companies maintain around 2,000
employees detailed in its main office and other sites. Petitioner
corporation had changed its name to CEPA Operations in 1996
and to Southern Company in 2001. In 2002, Southern Company
was sold to petitioner Mirant whose corporate parent is an
Atlanta-based power producer in the United States of
America.6 Petitioner corporation is now known as Team Energy
Corporation.7
Petitioner Edgardo A. Bautista (Bautista) was the President of
petitioner corporation when respondent was terminated from
employment.8
Respondent was hired by Mirant Pagbilao on January 3, 1994 as
its Logistics Officer. In 2002, when Southern Company was sold
to Mirant, respondent was already a Supervisor of the Logistics
and Purchasing Department of petitioner. At the time of the
severance of his employment, respondent was the Procurement
Supervisor of Mirant Pagbilao assigned at petitioner corporation’s
corporate office. As Procurement Supervisor, his main task was
to serve as the link between the Materials Management
Department of petitioner corporation and its staff, and the
suppliers and service contractors in order to ensure that
procurement is carried out in conformity with set policies,
procedures and practices. In addition, respondent was put
incharge of ensuring the timely, economical, safe and expeditious
delivery of materials at the right quality and quantity to petitioner
corporation’s plant. Respondent was also responsible for guiding
and overseeing the welfare and training needs of the staff of the
Materials Management Department. Due to the nature of
respondent’s functions, petitioner corporation considers his
position as confidential.9
The antecedent facts follow:
Respondent filed a complaint10 for illegal dismissal and money
claims for 13th and 14th month pay, bonuses and other benefits,
as well as the payment of moral and exemplary damages and
attorney’s fees. Respondent posits the following allegations in his
Position Paper:11
On January 3, 1994, respondent was hired by petitioner
corporation as its Logistics Officer and was assigned at petitioner
corporation’s corporate office in Pasay City. At the time of the
filing of the complaint, respondent was already a Supervisor at
the Logistics and Purchasing Department with a monthly salary of
₱39,815.00.
On November 3, 2004, petitioner corporation conducted a
random drug test where respondent was randomly chosen among
its employees who would be tested for illegal drug use. Through
an Intracompany Correspondence,12 these employees were
informed that they were selected for random drug testing to be
conducted on the same day that they received the
correspondence. Respondent was duly notified that he was
scheduled to be tested after lunch on that day. His receipt of the
notice was evidenced by his signature on the correspondence.
Respondent avers that at around 11:30 a.m. of the same day, he
received a phone call from his wife’s colleague who informed him
that a bombing incident occurred near his wife’s work station in
Tel Aviv, Israel where his wife was then working as a caregiver.
Respondent attached to his Position Paper a Press Release13 of
the Department of Foreign Affairs (DFA) in Manila to prove the
occurrence of the bombing incident and a letter14 from the
colleague of his wife who allegedly gave him a phone call from
Tel Aviv.
Respondent claims that after the said phone call, he proceeded to
the Israeli Embassy to confirm the news on the alleged bombing
incident. Respondent further claims that before he left the office
on the day of the random drug test, he first informed the secretary
of his Department, Irene Torres (Torres), at around 12:30 p.m.
that he will give preferential attention to the emergency phone call
that he just received. He also told Torres that he would be back at
the office as soon as he has resolved his predicament.
Respondent recounts that he tried to contact his wife by phone
but he could not reach her. He then had to go to the Israeli
Embassy to confirm the bombing incident. However, he was told
by Eveth Salvador (Salvador), a lobby attendant at the Israeli
Embassy, that he could not be allowed entry due to security
reasons.
On that same day, at around 6:15 p.m., respondent returned to
petitioner corporation’s office. When he was finally able to charge
his cellphone at the office, he received a text message from Tina
Cecilia (Cecilia), a member of the Drug Watch Committee that
conducted the drug test, informing him to participate in the said
drug test. He immediately called up Cecilia to explain the reasons
for his failure to submit himself to the random drug test that day.
He also proposed that he would submit to a drug test the
following day at his own expense. Respondent never heard from
Cecilia again.
On November 8, 2004, respondent received a Show Cause
Notice15 from petitioner corporation through Jaime Dulot (Dulot),
his immediate supervisor, requiring him to explain in writing why
he should not be charged with "unjustified refusal to submit to
random drug testing." Respondent submitted his written
explanation16 on November 11, 2004. Petitioner corporation
further required respondent on December 14, 2004 to submit
additional pieces of supporting documents to prove that
respondent was at the Israeli Embassy in the afternoon of
November 3, 2004 and that the said bombing incident actually
occurred. Respondent requested for a hearing to explain that he
could not submit proof that he was indeed present at the Israeli
Embassy during the said day because he was not allegedly
allowed entry by the embassy due to security reasons. On
January 3, 2005, respondent submitted the required additional
supporting documents.17
On January 13, 2005, petitioner corporation’s Investigating Panel
issued an Investigating Report18 finding respondent guilty of
"unjustified refusal to submit to random drug testing" and
recommended a penalty of four working weeks suspension
without pay, instead of termination, due to the presence of
mitigating circumstances. In the same Report, the Investigating
Panel also recommended that petitioner corporation should
review its policy on random drug testing, especially of the
ambiguities cast by the term "unjustified refusal."
On January 19, 2005, petitioner corporation’s Asst. Vice
President for Material Management Department, George K.
Lamela, Jr. (Lamela), recommended19 that respondent be
terminated from employment instead of merely being suspended.
Lamela argued that even if respondent did not outrightly refuse to
take the random drug test, he avoided the same. Lamela averred
that "avoidance" was synonymous with "refusal."
On February 14, 2005, respondent received a letter20 from
petitioner corporation’s Vice President for Operations, Tommy J.
Sliman (Sliman), terminating him on the same date. Respondent
filed a Motion to Appeal21 his termination on February 23, 2005.
The motion was denied by petitioner corporation on March 1,
2005.
It is the contention of respondent that he was illegally dismissed
by petitioner corporation due to the latter’s non-compliance with
the twin requirements of notice and hearing. He asserts that while
there was a notice charging him of "unjustified refusal to submit to
random drug testing," there was no notice of hearing and
petitioner corporation’s investigation was not the equivalent of the
"hearing" required under the law which should have accorded
respondent the opportunity to be heard.
Respondent further asserts that he was illegally dismissed due to
the following circumstances:
1. He signed the notice that he was randomly selected as
a participant to the company drug testing;
2. Even the Investigating Panel was at a loss in
interpreting the charge because it believed that the term
"refusal" was ambiguous, and therefore such doubt must
be construed in his favor; and
3. He agreed to take the drug test the following day at his
own expense, which he says was clearly not an indication
of evasion from the drug test.
Petitioner corporation counters with the following allegations:
On November 3, 2004, a random drug test was conducted on
petitioner corporation’s employees at its Corporate Office at the
CTC Bldg. in Roxas Blvd., Pasay City. The random drug test was
conducted pursuant to Republic Act No. 9165, otherwise known
as the "Comprehensive Dangerous Drugs Act of 2002."
Respondent was randomly selected among petitioner’s
employees to undergo the said drug test which was to be carried
out by Drug Check Philippines, Inc.22
When respondent failed to appear at the scheduled drug test,
Cecilia prepared an incident report addressed to Dulot, the
Logistics Manager of the Materials Management
Department.23 Since it was stated under petitioner corporation’s
Mirant Drugs Policy Employee Handbook to terminate an
employee for "unjustified refusal to submit to a random drug test"
for the first offense, Dulot sent respondent a Show Cause
Notice24 dated November 8, 2004, requiring him to explain why no
disciplinary action should be imposed for his failure to take the
random drug test. Respondent, in a letter dated November 11,
2004, explained that he attended to an emergency call from his
wife’s colleague and apologized for the inconvenience he had
caused. He offered to submit to a drug test the next day even at
his expense.25 Finding respondent’s explanation unsatisfactory,
petitioner corporation formed a panel to investigate and
recommend the penalty to be imposed on respondent.26 The
Investigating Panel found respondent’s explanations as to his
whereabouts on that day to be inconsistent, and recommended
that he be suspended for four weeks without pay. The
Investigating Panel took into account that respondent did not
directly refuse to be subjected to the drug test and that he had
been serving the company for ten years without any record of
violation of its policies. The Investigating Panel further
recommended that the Mirant Drug Policy be reviewed to clearly
define the phrase "unjustified refusal to submit to random drug
testing."27 Petitioner corporation’s Vice-President for Operations,
Sliman, however disagreed with the Investigating Panel’s
recommendations and terminated the services of respondent in
accordance with the subject drug policy. Sliman likewise stated
that respondent’s violation of the policy amounted to willful breach
of trust and loss of confidence.28
A cursory examination of the pleadings of petitioner corporation
would show that it concurs with the narration of facts of
respondent on material events from the time that Cecilia sent an
electronic mail at about 9:23 a.m. on November 3, 2004 to all
employees of petitioner corporation assigned at its Corporate
Office advising them of the details of the drug test – up to the time
of respondent’s missing his schedule to take the drug test.
Petitioner corporation and respondent’s point of disagreement,
however, is whether respondent’s proffered reasons for not being
able to take the drug test on the scheduled day constituted valid
defenses that would have taken his failure to undergo the drug
test out of the category of "unjustified refusal." Petitioner
corporation argues that respondent’s omission amounted to
"unjustified refusal" to submit to the random drug test as he could
not proffer a satisfactory explanation why he failed to submit to
the drug test:
1. Petitioner corporation is not convinced that there was
indeed such a phone call at noon of November 3, 2004 as
respondent could not even tell who called him up.
2. Respondent could not even tell if he received the call
via the landline telephone service at petitioner
corporation’s office or at his mobile phone.
3. Petitioner corporation was also of the opinion that
granting there was such a phone call, there was no
compelling reason for respondent to act on it at the
expense of his scheduled drug testing. Petitioner
corporation principally pointed out that the call merely
stated that a bomb exploded near his wife’s work station
without stating that his wife was affected. Hence, it found
no point in confirming it with extraordinary haste and
forego the drug test which would have taken only a few
minutes to accomplish. If at all, respondent should have
undergone the drug testing first before proceeding to
confirm the news so as to leave his mind free from this
obligation.
4. Petitioner corporation maintained that respondent could
have easily asked permission from the Drug Watch
Committee that he was leaving the office since the place
where the activity was conducted was very close to his
work station.29
To the mind of petitioners, they are not liable for illegal dismissal
because all of these circumstances prove that respondent really
eluded the random drug test and was therefore validly terminated
for cause after being properly accorded with due process.
Petitioners further argue that they have already fully settled the
claim of respondent as evidenced by a Quitclaim which he duly
executed. Lastly, petitioners maintain that they are not guilty of
unfair labor practice as respondent’s dismissal was not intended
to curtail his right to self-organization; that respondent is not
entitled to the payment of his 13th and 14th month bonuses and
other incentives as he failed to show that he is entitled to these
amounts according to company policy; that respondent is not
entitled to reinstatement, payment of full back wages, moral and
exemplary damages and attorney’s fees due to his termination for
cause.
In a decision dated August 31, 2005, Labor Arbiter Aliman D.
Mangandog found respondent to have been illegally dismissed.
The Labor Arbiter also found that the quitclaim purportedly
executed by respondent was not a bona fide quitclaim which
effectively discharged petitioners of all the claims of respondent in
the case at bar. If at all, the Labor Arbiter considered the
execution of the quitclaim as a clear attempt on the part of
petitioners to mislead its office into thinking that respondent no
longer had any cause of action against petitioner corporation. The
decision stated, viz.:
WHEREFORE, premises considered, this Office finds
respondents GUILTY of illegal dismissal, and hereby ordered to
jointly and severally reinstate complainant back to his former
position without loss on seniority rights and benefits and to pay
him his backwages and other benefits from the date he was
illegally dismissed up to the time he is actually reinstated, partially
computed as of this date in the amount of ₱258,797.50
(₱39,815.00 x 6.5 mos.) plus his 13th and 14th month pay in the
amount of ₱43,132.91 or in the total amount of ₱301,930.41.
Respondents are also ordered to pay complainant the amount of
₱3,000,000.00 as and by way of moral and exemplary damages,
and to pay complainant the amount equivalent to ten percent
(10%) of the total awards as and by way of attorney’s fees.
SO ORDERED.30
The Labor Arbiter stated that while petitioner corporation
observed the proper procedure in the termination of an employee
for a purported authorized cause, such just cause did not exist in
the case at bar. The decision did not agree with the conclusions
reached by petitioner corporation’s own Investigating Panel that
while respondent did not refuse to submit to the questioned drug
test and merely "avoided" it on the designated day, "avoidance"
and "refusal" are one and the same. It also held that the terms
"avoidance" and "refusal" are separate and distinct and that "the
two words are not even synonymous with each other."31 The
Labor Arbiter considered as more tenable the stance of
respondent that his omission merely resulted to a "failure" to
submit to the said drug test – and not an "unjustified refusal."
Even if respondent’s omission is to be considered as refusal, the
Labor Arbiter opined that it was not tantamount to "unjustified
refusal" which constitutes as just cause for his termination.
Finally, the Labor Arbiter found that respondent was entitled to
moral and exemplary damages and attorney’s fees.
On appeal to the NLRC, petitioners alleged that the decision of
the Labor Arbiter was rendered with grave abuse of discretion for
being contrary to law, rules and established jurisprudence, and
contained serious errors in the findings of facts which, if not
corrected, would cause grave and irreparable damage or injury to
petitioners. The NLRC, giving weight and emphasis to the
inconsistencies in respondent’s explanations, considered his
omission as "unjustified refusal" in violation of petitioner
corporation’s drug policy. Thus, in a decision dated May 31, 2006,
the NLRC ruled, viz.:
x x x [Respondent] was duly notified as shown by copy of the
notice x x x which he signed to acknowledge receipt thereof on
the said date. [Respondent] did not refute [petitioner
corporation’s] allegation that he was also personally reminded of
said drug test on the same day by Ms. Cecilia of [petitioner
corporation’s] drug watch committee. However, [respondent] was
nowhere to be found at [petitioner corporation’s] premises at the
time when he was supposed to be tested. Due to his failure to
take part in the random drug test, an incident report x x x was
prepared by the Drug Cause Notice x x x to explain in writing why
no disciplinary action should be taken against him for his
unjustified refusal to submit to random drug test, a type D offense
punishable with termination. Pursuant to said directive,
[respondent] submitted an explanation x x x on 11 November
2004, pertinent portions of which read:
"I was scheduled for drug test after lunch that day of November 3,
2004 as confirmed with Tina Cecilia. I was having my lunch when
a colleague of my wife abroad called up informing me that there
was something wrong [that] happened in their neighborhood,
where a bomb exploded near her workstation. Immediately, I [left]
the office to confirm said information but at around 12:30 P.M.
that day, I informed MS. IRENE TORRES, our Department
Secretary[,] that I would be attending to this emergency call. Did
even [inform] her that I’ll try to be back as soon as possible but
unfortunately, I was able to return at 6:15 P.M. I didn’t know that
Tina was the one calling me on my cell that day. Did only receive
her message after I charged my cell at the office that night. I was
able to call back Tina Cecilia later [that] night if it’s possible to
have it (drug test) the next day.
My apology [for] any inconvenience to the Drug Watch
Committee, that I forgot everything that day including my
scheduled drug test due to confusion of what had happened. It
[was] not my intention not to undergo nor refuse to have a drug
test knowing well that it’s a company policy and it’s mandated by
law."
In the course of the investigation, [respondent] was requested to
present proof pertaining to the alleged call he received on 3
November 2004 from a colleague of his wife regarding the bomb
explosion in Tel Aviv, his presence at the Israel Embassy also on
3 November 2004. [Respondent], thereafter, submitted a
facsimile which he allegedly received from his wife's colleague
confirming that she called and informed him of the bombing
incident. However, a perusal of said facsimile x x x reveals that
the same cannot be given any probative value because, as
correctly observed by [petitioners], it can barely be read and upon
inquiry with PLDT, the international area code of Israel which is
00972 should appear on the face of the facsimile if indeed said
facsimile originated from Israel. [Respondent] also could not
present proof of his presence at the Israel Embassy on said time
and date. He instead provided the name of a certain Ms. Eveth
Salvador of said embassy who could certify that he was present
thereat. Accordingly, Mr. Bailon, a member of the investigation
panel, verified with Ms. Salvador who told him that she is only the
telephone operator of the Israel Embassy and that she was not in
a position to validate [respondent’s] presence at the Embassy.
Mr. Bailon was then referred to a certain Ms. Aimee Zandueta,
also of said embassy, who confirmed that based on their records,
[respondent] did not visit the embassy nor was he attended to by
any member of said embassy on 3 November 2004. Ms.
Zandueta further informed Mr. Bailon that no bombing occurred in
Tel Aviv on 3 November 2004 and that the only reported incident
of such nature occurred on 1 November 2004. A letter x x x to this
effect was written by Consul Ziva Samech of the Embassy of
Israel. A press release x x x of the Department of Foreign Affairs
confirm[ed] that the bombing occurred on 1 November 2004.
In his explanation, the [respondent] stated that the reason why he
had to leave the office on 3 November 2004 was to verify an
information at the Israel Embassy of the alleged bombing incident
on the same day. However, [petitioners] in their position paper
alleged that Ms. Torres of [petitioner] company received a text
message from him at around 12:47 p.m. informing her that he will
try to be back since he had a lot of things to do and asking her if
there was a signatory on that day. [Respondent] did not deny
sending said text messages to Ms. Torres in his reply and
rejoinder x x x. He actually confirmed that he was involved in the
CIIS registration with all companies that was involved with
[petitioner] company and worked on the registration of [petitioner]
company’s vehicles with TRO.
It is also herein noted that [respondent] had initially reported to
Ms. Torres that it was his mother in law who informed him about
the problem concerning his wife. However, in his written
explanation x x x, the [respondent] stated that it was a friend of
his wife, whom he could not even identify, who informed him of
the alleged bombing incident in Tel Aviv, Israel. [Respondent]
also did not deny receiving a cellphone call from Ms. Cecilia that
day. He merely stated that he did not know that it was Ms. Cecilia
calling him up in a cellphone and it was only after he charged his
cellphone at the office that night that he received her message. In
effect, [respondent] asserted that his cellphone battery was
running low or drained. [Petitioners] were able to refute [these]
averments of [respondent] when they presented [respondent’s]
Smart Billing Statement
x x x showing that he was able to make a cellphone call at 5:29
p.m. to [petitioner corporation’s] supplier, Mutico for a duration of
two (2) minutes.32
Given the foregoing facts, the NLRC stated that the offer of
respondent to submit to another drug test the following day, even
at his expense, cannot operate to free him from liability. The
NLRC opined that taking the drug test on the day following the
scheduled random drug test would affect both the integrity and
the accuracy of the specimen which was supposed to be taken
from a randomly selected employee who was notified of his/her
selection on the same day that the drug test was to be
administered. The NLRC further asserted that a drug test,
conducted many hours or a day after the employee was notified,
would compromise its results because the employee may have
possibly taken remedial measures to metabolize or eradicate
whatever drugs s/he may have ingested prior to the drug test.
The NLRC further stated that these circumstances have clearly
established the falsity of respondent’s claims and found no
justifiable reason for respondent to refuse to submit to the
petitioner corporation’s random drug test. While the NLRC
acknowledged that it was petitioner corporation’s own
Investigating Panel that considered respondent’s failure to take
the required drug test as mere "avoidance" and not "unjustified
refusal," it concluded that such finding was merely
recommendatory to guide top management on what action to
take.
The NLRC also found that petitioner corporation’s denial of
respondent’s motion to reconsider his termination was in order.
Petitioner corporation’s reasons for such denial are quoted in the
NLRC decision, viz.:
"Your appeal is anchored on your claim that you responded to an
emergency call from someone abroad informing you that a bomb
exploded near the work station of your wife making you unable to
undergo the scheduled drug testing. This claim is groundless
taking into account the following:
We are not convinced that there was indeed that call which you
claim to have received noon of November 3, 2004. On the
contrary, our belief is based on the fact that you could not tell who
called you up or how the call got to you. If you forgot to ask the
name of the person who called you up, surely you would have
known how the call came to you. You said you were having lunch
at the third floor of the CTC building when you received the call.
There were only two means of communication available to you
then: the land line telephone service in your office and your
mobile phone. If your claim were (sic) not fabricated, you would
be able to tell which of these two was used.
Granting that you indeed received that alleged call, from your own
account, there was no compelling reason for you to act on it at
the expense of your scheduled drug testing. The call, as it were,
merely stated that ‘something wrong happened (sic) in their
neighborhood, where a bomb exploded near her workstation.’
Nothing was said if your wife was affected. There is no point in
confirming it with extraordinary haste and forego the drug test
which would have taken only a few minutes to accomplish. If at
all, you should have undergone the drug testing first before
proceeding to confirm the news so as to leave your mind free
from this obligation.
Additionally, if it was indeed necessary that you skip the
scheduled drug testing to verify that call, why did you not ask
permission from the Drug Watch [C]ommittee that you were
leaving? The place where the activity was being conducted was
very close to your workstation. It was absolutely within your reach
to inform any of its members that you were attending to an
emergency call. Why did you not do so?
All this undisputedly proves that you merely eluded the drug
testing. Your claim that you did not refuse to be screened carries
no value. Your act was a negation of your words."33
The NLRC found that respondent was not only validly dismissed
for cause – he was also properly accorded his constitutional right
to due process as shown by the following succession of events:
1. On November 8, 2004, respondent was given a show-
cause notice requiring him to explain in writing within
three days why no disciplinary action should be taken
against him for violation of company policy on unjustified
refusal to submit to random drug testing – a type D
offense which results in termination.
2. Respondent submitted his explanation on November
11, 2004.
3. On December 9, 2004, respondent was given a notice
of investigation34 informing him of a meeting on December
13, 2004 at 9:00 a.m. In this meeting, respondent was
allowed to explain his side, present his evidences and
witnesses, and confront the witnesses presented against
him.
4. On February 14, 2005, respondent was served a letter
of termination which clearly stated the reasons therefor.35
The NLRC, notwithstanding its finding that respondent was
dismissed for cause and with due process, granted financial
assistance to respondent on equitable grounds. It invoked the
past decisions of this Court which allowed the award of financial
assistance due to factors such as long years of service or the
Court’s concern and compassion towards labor where the
infraction was not so serious. Thus, considering respondent’s 10
years of service with petitioner corporation without any record of
violation of company policies, the NLRC ordered petitioner
corporation to pay respondent financial assistance equivalent to
one-half (1/2) month pay for every year of service in the amount
of One Hundred Ninety-Nine Thousand Seventy-Five Pesos
(₱199,075.00). The NLRC decision states thus:
WHEREFORE, the decision dated 31 August 2005 is VACATED
and SET ASIDE. The instant complaint is dismissed for lack of
merit. However, respondent Mirant [Philippines] Corp. is ordered
to pay complainant financial assistance in the amount of one
hundred ninety-nine thousand seventy five pesos (₱199,075.00).
SO ORDERED.36
Respondent filed a motion for reconsideration,37 while petitioners
filed a motion for partial reconsideration38 of the NLRC decision. In
a Resolution39 dated June 30, 2006, the NLRC denied both
motions.
In a petition for certiorari before the CA, respondent raised the
following issues: whether the NLRC acted without or in excess of
its jurisdiction, or with grave abuse of discretion amounting to lack
or excess of its jurisdiction when it construed that the terms
"failure," "avoidance," "refusal" and "unjustified refusal" have
similar meanings; reversed the factual findings of the Labor
Arbiter; and held that respondent deliberately breached
petitioner’s Anti-Drugs Policy.40 Respondent further argued before
the appellate court that his failure to submit himself to the random
drug test was justified because he merely responded to an
emergency call regarding his wife’s safety in Tel Aviv, and that
such failure cannot be considered synonymous with "avoidance"
or "refusal" so as to mean "unjustified refusal" in order to be
meted the penalty of termination.41
The CA disagreed with the NLRC and ruled that it was immaterial
whether respondent failed, refused, or avoided being tested. To
the appellate court, the singular fact material to this case was that
respondent did not get himself tested in clear disobedience of
company instructions and policy. Despite such disobedience,
however, the appellate court considered the penalty of dismissal
to be too harsh to be imposed on respondent, viz.:
x x x While it is a management prerogative to terminate its erring
employee for willful disobedience, the Supreme Court has
recognized that such penalty is too harsh depending on the
circumstances of each case. "There must be reasonable
proportionality between, on the one hand, the willful disobedience
by the employee and, on the other hand, the penalty imposed
therefor" x x x.
In this case, [petitioner corporation’s] own investigating panel has
revealed that the penalty of dismissal is too harsh to impose on
[respondent], considering that this was the first time in his 10-year
employment that the latter violated its company policies. The
investigating panel even suggested that a review be had of the
company policy on the term "unjustified refusal" to clearly define
what constitutes a violation thereof. The recommendation of the
investigating panel is partially reproduced as follows:
"VII. Recommendation
However, despite having violated the company policy, the panel
recommends 4 working weeks suspension without pay (twice the
company policy’s maximum of 2 working weeks suspension)
instead of termination due to the following mitigating
circumstances.
1. Mr. Joselito A. Caro did not directly refuse to be
subjected to the random drug test scheduled on
November 3, 2004.
2. In the case of Mr. Joselito A. Caro, the two conditions
for termination (Unjustified and Refusal) were not fully
met as he expressly agreed to undergo drug test.
3. Mr. Joselito A. Caro voluntarily offered himself to
undergo drug test the following day at his own expense.
Doubling the maximum of 2 weeks suspension to 4 weeks is
indicative of the gravity of the offense committed. The panel
believes that although mitigating factors partially offset reasons
for termination, the 2 weeks maximum suspension is too lenient
penalty for such an offense.
The Panel also took into consideration that Mr. Joselito A. Caro
has served the company for ten (10) years without any record of
violation of the company policies.
xxxx
The Panel also recommends that Management review the Mirant
Drug Policy specifically ‘Unjustified [R]efusal to submit to random
drug testing.’ The Panel believes that the term refusal casts
certain ambiguities and should be clearly defined."42
The CA however found that award of moral and exemplary
damages is without basis due to lack of bad faith on the part of
the petitioner corporation which merely acted within its
management prerogative. In its assailed Decision dated June 26,
2007, the CA ruled, viz.:
IN VIEW OF ALL THE FOREGOING, the instant petition is
GRANTED. The assailed Decision dated May 31, 2006 and
Resolution dated June 30, 2006 rendered by the National Labor
Relations Commission (NLRC) in NLRC NCR CA No. 046551-05
(NCR-00-03-02511-05) are REVERSED and SET ASIDE. The
Labor Arbiter’s Decision dated August 31, 2005 is hereby
REINSTATED with MODIFICATION by omitting the award of
moral and exemplary damages as well as attorney’s fees, and
that the petitioner’s salary equivalent to four (4) working weeks at
the time he was terminated be deducted from his backwages. No
cost.
SO ORDERED.43
Petitioner moved for reconsideration. In its assailed Resolution
dated January 11, 2008, the CA denied petitioners’ motion for
reconsideration for lack of merit. It ruled that the arguments in the
motion for reconsideration were already raised in their past
pleadings.
In this instant Petition, petitioners raise the following grounds:
I. THE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR WHEN IT FAILED TO CONSIDER THAT:
A. THE PETITION FOR CERTIORARI FILED BY
RESPONDENT CARO SHOULD HAVE BEEN
SUMMARILY DISMISSED CONSIDERING THAT
IT LACKED THE REQUISITE VERIFICATION
AND CERTIFICATION AGAINST FORUM
SHOPPING REQUIRED BY THE RULES OF
COURT; OR
B. AT THE VERY LEAST, THE SAID PETITION
FOR CERTIORARI FILED BY RESPONDENT
CARO SHOULD HAVE BEEN CONSIDERED
MOOT SINCE RESPONDENT CARO HAD
ALREADY PREVIOUSLY EXECUTED A
QUITCLAIM DISCHARGING THE PETITIONERS
FROM ALL HIS MONETARY CLAIMS.
II. THE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR AND DECIDED QUESTIONS OF SUBSTANCE IN A
WAY NOT IN ACCORDANCE WITH LAW AND APPLICABLE
DECISIONS OF THE HONORABLE COURT, CONSIDERING
THAT:
A. THE COURT OF APPEALS REVERSED THE
DECISION DATED 31 MAY 2006 OF THE NLRC
ON THE GROUND THAT THERE WAS GRAVE
ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION
NOTWITHSTANDING THE FACT THAT IT
AFFIRMED THE NLRC’S FINDINGS THAT
RESPONDENT CARO DELIBERATELY
DISOBEYED PETITIONER MIRANT’S ANTI-
DRUGS POLICY.
B. THE PENALTY OF TERMINATION SHOULD
HAVE BEEN SUSTAINED BY THE COURT OF
APPEALS GIVEN ITS POSITIVE FINDING THAT
RESPONDENT CARO DELIBERATELY AND
WILLFULLY DISOBEYED PETITIONER
MIRANT’S ANTI-DRUGS POLICY.
C. IN INVALIDATING RESPONDENT CARO’S
DISMISSAL, THE COURT OF APPEALS
SUBSTITUTED WITH ITS OWN DISCRETION A
CLEAR MANAGEMENT PREROGATIVE
BELONGING ONLY TO PETITIONER MIRANT IN
THE INSTANT CASE.
D. THE WILLFUL AND DELIBERATE VIOLATION
OF PETITIONER MIRANT’S ANTI-DRUGS
POLICY AGGRAVATED RESPONDENT CARO’S
WRONGFUL CONDUCT WHICH JUSTIFIED HIS
TERMINATION.
E. IN INVALIDATING RESPONDENT CARO’S
DISMISSAL, THE COURT OF APPEALS, IN
EFFECT, BELITTLED THE IMPORTANCE AND
SERIOUSNESS OF PETITIONER MIRANT’S
ANTI-DRUGS POLICY AND CONSEQUENTLY
HAMPERED THE EFFECTIVE
IMPLEMENTATION OF THE SAME.
 F. THE EXISTENCE OF OTHER GROUNDS
FOR CARO’S DISMISSAL, SUCH AS WILLFUL
DISOBEDIENCE AND [LOSS] OF TRUST AND
CONFIDENCE, JUSTIFIED HIS TERMINATION
FROM EMPLOYMENT.
III. NONETHELESS, THE AWARD OF FINANCIAL
ASSISTANCE IN FAVOR OF RESPONDENT CARO IS NOT
WARRANTED CONSIDERING THAT RESPONDENT CARO’S
WILLFUL AND DELIBERATE REFUSAL TO SUBJECT HIMSELF
TO PETITIONER MIRANT’S DRUG TEST AND HIS
SUBSEQUENT EFFORTS TO CONCEAL THE SAME SHOWS
HIS DEPRAVED MORAL CHARACTER.
IV. THE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT
HELD PETITIONER BAUTISTA PERSONALLY LIABLE FOR
[RESPONDENT] CARO’S UNFOUNDED CLAIMS
CONSIDERING THAT, ASIDE FROM RESPONDENT CARO’S
DISMISSAL BEING LAWFUL, PETITIONER BAUTISTA
MERELY ACTED WITHIN THE SCOPE OF HIS FUNCTIONS IN
GOOD FAITH.44
We shall first rule on the issue raised by petitioners that the
petition for certiorari filed by respondent with the CA should have
been summarily dismissed as it lacked the requisite verification
and certification against forum shopping under Sections 4 and 5,
Rule 7 of the Rules, viz.:
SEC. 4. Verification. – Except when otherwise specifically
required by law or rule, pleadings need not be under oath, verified
or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the
pleading and that the allegations therein are true and correct of
his knowledge and belief.
A pleading required to be verified which contains a verification
based on "information and belief," or upon "knowledge,
information and belief," or lacks a proper verification, shall be
treated as an unsigned pleading.
SEC. 5. Certification against forum shopping. – The plaintiff or
principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith:
(a) that he has not theretofore commenced any action or filed any
claim involving the same issues in any court, tribunal or quasi-
judicial agency and, to the best of his knowledge, no such other
action or claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same
or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certification or noncompliance
with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping,
the same shall be ground for summary dismissal with prejudice
and shall constitute direct contempt, as well as a cause for
administrative sanctions.
It is the contention of petitioners that due to respondent’s failure
to subscribe the Verification and Certification of Non-Forum
Shopping before a Notary Public, the said verification and
certification cannot be considered to have been made under oath.
Accordingly, such omission is fatal to the entire petition for not
being properly verified and certified. The CA therefore erred when
it did not dismiss the petition.
This jurisdiction has adopted in the field of labor protection a
liberal stance towards the construction of the rules of procedure
in order to serve the ends of substantial justice. This liberal
construction in labor law emanates from the mandate that the
workingman’s welfare should be the primordial and paramount
consideration.45 Thus, if the rules of procedure will stunt courts
from fulfilling this mandate, the rules of procedure shall be
relaxed if the circumstances of a case warrant the exercise of
such liberality. If we sustain the argument of petitioners in the
case at bar that the petition for certiorari should have been
dismissed outright by the CA, the NLRC decision would have
reached finality and respondent would have lost his remedy and
denied his right to be protected against illegal dismissal under the
Labor Code, as amended.
It is beyond debate that petitioner corporation’s enforcement of its
Anti-Drugs Policy is an exercise of its management prerogative. It
is also a conceded fact that respondent "failed" to take the
random drug test as scheduled, and under the said company
policy, such failure metes the penalty of termination for the first
offense. A plain, simple and literal application of the said policy to
the omission of respondent would have warranted his outright
dismissal from employment – if the facts were that simple in the
case at bar. Beyond debate – the facts of this case are not – and
this disables the Court from permitting a straight application of an
otherwise prima facie straightforward rule if the ends of
substantial justice have to be served.
It is the crux of petitioners’ argument that respondent’s omission
amounted to "unjust refusal" because he could not sufficiently
support with convincing proof and evidence his defenses for
failing to take the random drug test. For petitioners, the
inconsistencies in respondent’s explanations likewise operated to
cast doubt on his real reasons and motives for not submitting to
the random drug test on schedule. In recognition of these
inconsistencies and the lack of convincing proof from the point of
view of petitioners, the NLRC reversed the decision of the Labor
Arbiter. The CA found the ruling of the Labor Arbiter to be more in
accord with the facts, law and existing jurisprudence.
We agree with the disposition of the appellate court that there
was illegal dismissal in the case at bar.
While the adoption and enforcement by petitioner corporation of
its Anti-Drugs Policy is recognized as a valid exercise of its
management prerogative as an employer, such exercise is not
absolute and unbridled. Managerial prerogatives are subject to
limitations provided by law, collective bargaining agreements, and
the general principles of fair play and justice.46 In the exercise of
its management prerogative, an employer must therefore ensure
that the policies, rules and regulations on work-related activities
of the employees must always be fair and reasonable and the
corresponding penalties, when prescribed, commensurate to the
offense involved and to the degree of the infraction.47 The Anti-
Drugs Policy of Mirant fell short of these requirements.
Petitioner corporation’s subject Anti-Drugs Policy fell short of
being fair and reasonable.
First. The policy was not clear on what constitutes "unjustified
refusal" when the subject drug policy prescribed that an
employee’s "unjustified refusal" to submit to a random drug test
shall be punishable by the penalty of termination for the first
offense. To be sure, the term "unjustified refusal" could not
possibly cover all forms of "refusal" as the employee’s resistance,
to be punishable by termination, must be "unjustified." To the
mind of the Court, it is on this area where petitioner corporation
had fallen short of making it clear to its employees – as well as to
management – as to what types of acts would fall under the
purview of "unjustified refusal." Even petitioner corporation’s own
Investigating Panel recognized this ambiguity, viz.:
The Panel also recommends that Management review the Mirant
Drug Policy specifically "Unjustified [R]efusal to submit to random
drug testing." The Panel believes that the term "refusal" casts
certain ambiguities and should be clearly defined.48
The fact that petitioner corporation’s own Investigating Panel and
its Vice President for Operations, Sliman, differed in their
recommendations regarding respondent’s case are first-hand
proof that there, indeed, is ambiguity in the interpretation and
application of the subject drug policy. The fact that petitioner
corporation’s own personnel had to dissect the intended meaning
of "unjustified refusal" is further proof that it is not clear on what
context the term "unjustified refusal" applies to. It is therefore not
a surprise that the Labor Arbiter, the NLRC and the CA have
perceived the term "unjustified refusal" on different prisms due to
the lack of parameters as to what comes under its purview. To be
sure, the fact that the courts and entities involved in this case had
to engage in semantics – and come up with different
constructions – is yet another glaring proof that the subject policy
is not clear creating doubt that respondent’s dismissal was a
result of petitioner corporation’s valid exercise of its management
prerogative.
It is not a mere jurisprudential principle, but an enshrined
provision of law, that all doubts shall be resolved in favor of labor.
Thus, in Article 4 of the Labor Code, as amended, "[a]ll doubts in
the implementation and interpretation of the provisions of [the
Labor] Code, including its implementing rules and regulations,
shall be resolved in favor of labor." In Article 1702 of the New
Civil Code, a similar provision states that "[i]n case of doubt, all
labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer." Applying these
provisions of law to the circumstances in the case at bar, it is not
fair for this Court to allow an ambiguous policy to prejudice the
rights of an employee against illegal dismissal. To hold otherwise
and sustain the stance of petitioner corporation would be to adopt
an interpretation that goes against the very grain of labor
protection in this jurisdiction. As correctly stated by the Labor
Arbiter, "when a conflicting interest of labor and capital are
weighed on the scales of social justice, the heavier influence of
the latter must be counter-balanced by the sympathy and
compassion the law must accord the underprivileged worker."49
Second. The penalty of termination imposed by petitioner
corporation upon respondent fell short of being reasonable.
Company policies and regulations are generally valid and binding
between the employer and the employee unless shown to be
grossly oppressive or contrary to law50 – as in the case at bar.
Recognizing the ambiguity in the subject policy, the CA was more
inclined to adopt the recommendation of petitioner corporation’s
own Investigating Panel over that of Sliman and the NLRC. The
appellate court succinctly but incisively pointed out, viz.:
x x x We find, as correctly pointed out by the investigating panel,
that the [petitioner corporation’s] Anti-Drug Policy is excessive in
terminating an employee for his "unjustified refusal" to subject
himself to the random drug test on first offense, without clearly
defining what amounts to an "unjustified refusal."
Thus, We find that the recommended four (4) working weeks’
suspension without pay as the reasonable penalty to be imposed
on [respondent] for his disobedience. x x x51 (Additional emphasis
supplied.)
To be sure, the unreasonableness of the penalty of termination as
imposed in this case is further highlighted by a fact admitted by
petitioner corporation itself: that for the ten-year period that
respondent had been employed by petitioner corporation, he did
not have any record of a violation of its company policies.
As to the other issue relentlessly being raised by petitioner
corporation that respondent’s petition for certiorari before the CA
should have been considered moot as respondent had already
previously executed a quitclaim discharging petitioner corporation
from all his monetary claims, we cannot agree. Quitclaims
executed by laborers are ineffective to bar claims for the full
measure of their legal rights,52 especially in this case where the
evidence on record shows that the amount stated in the quitclaim
exactly corresponds to the amount claimed as unpaid wages by
respondent under Annex A53 of his Reply54 filed with the Labor
Arbiter. Prima facie, this creates a false impression that
respondent’s claims have already been settled by petitioner
corporation – discharging the latter from all of respondent’s
monetary claims. In truth and in fact, however, the amount paid
under the subject quitclaim represented the salaries of
respondent that remained unpaid at the time of his termination –
not the amounts being claimed in the case at bar.
We believe that this issue was extensively discussed by both the
Labor Arbiter and the CA and we find no reversible error on the
disposition of this issue, viz.:
A review of the records show that the alluded quitclaim, which
was undated and not even notarized although signed by the
petitioner, was for the amount of ₱59,630.05. The said quitclaim
was attached as Annex 26 in the [petitioners’] Position Paper filed
before the Labor Arbiter. As fully explained by [respondent] in his
Reply filed with the Labor Arbiter, the amount stated therein was
his last pay due to him when he was terminated, not the amount
representing his legitimate claims in this labor suit x x x. To
bolster his defense, [respondent] submitted the pay form issued
to him by the [petitioner corporation], showing his net pay at
₱59,630.05 exactly the amount stated in the quitclaim x x x.
Then, too, as stated on the quitclaim itself, the intention of the
waiver executed by the [respondent] was to release [petitioner
corporation] from any liability only on the said amount
representing [respondent’s] "full and final payment of [his] last
salary/separation pay" x x x. It did not in any way waive
[respondent’s] right to pursue his legitimate claims regarding his
dismissal in a labor suit. Thus, We gave no credence to
[petitioners’] private defense that alleged quitclaim rendered the
instant petition moot.55
Finally, the petition avers that petitioner Bautista should not be
held personally liable for respondent’s dismissal as he acted in
good faith and within the scope of his official functions as then
president of petitioner corporation. We agree with
petitioners. Both decisions of the Labor Arbiter and the CA did
1âwphi1
not discuss the basis of the personal liability of petitioner Bautista,
and yet the dispositive portion of the decision of the Labor Arbiter
- which was affirmed by the appellate court - held him jointly and
severally liable with petitioner corporation, viz.:
WHEREFORE, premises considered, this Office finds
respondents GUILTY of illegal dismissal, and hereby ordered to
jointly and severally reinstate complainant back to his former
position without loss on seniority rights and benefits and to pay
him his backwages and other benefits from the date he was
illegally dismissed up to the time he is actually reinstated, partially
computed as of this date in the amount of ₱258,797.50
(₱39,815.00 x 6.5 mos.) plus his 13th and 14th month pay in the
amount of ₱43,132.91 or in the total amount of ₱301,930.41.
Respondents are also ordered to pay complainant the amount of
₱3,000,000.00 as and by way of moral and exemplary damages,
and to pay complainant the amount equivalent to ten percent
(10%) of the total awards as and by way of attorney's fees.
SO ORDERED.56 (Emphasis supplied.)
A corporation has a personality separate and distinct from its
officers and board of directors who may only be held personally
liable for damages if it is proven that they acted with malice or
bad faith in the dismissal of an employee.57 Absent any evidence
on record that petitioner Bautista acted maliciously or in bad faith
in effecting the termination of respondent, plus the apparent lack
of allegation in the pleadings of respondent that petitioner
Bautista acted in such manner, the doctrine of corporate fiction
dictates that only petitioner corporation should be held liable for
the illegal dismissal of respondent.
WHEREFORE, the petition for review on certiorari is DENIED.
The assailed Decision dated June 26, 2007 and the Resolution
dated January 11, 2008 in CA-G.R. SP No. 96153 are
AFFIRMED with the MODIFICATION that only petitioner
corporation is found GUILTY of the illegal dismissal of respondent
Joselito A. Caro. Petitioner Edgardo A. Bautista is not held
personally liable as then President of petitioner corporation at the
time of the illegal dismissal.

No pronouncement as to costs.

SO ORDERED.
 SECOND DIVISION
The Facts
JEFFREY NACAGUE, G.R. No. 172589
Petitioner,
Present: On 15 June 1995, respondent Sulpicio Lines, Inc. (Sulpicio Lines)
hired Nacague as hepe de viaje or the representative
- versus - CARPIO, J., Chairperson,
NACHURA, of Sulpicio Lines on board its vessel M/V Princess of the World (the
PERALTA, ship).
ABAD, and
MENDOZA,JJ.
SULPICIO LINES, INC., On 25 January 2003, Sulpicio Lines received an
Respondent. anonymous letter reporting the use of illegal drugs on board the
Promulgated:
August 8, 2010 ship. On 14 February 2003, Ceasar T. Chico, a housekeeper on the
x------------------------------------------------- ship, submitted a report regarding the drug paraphernalia found inside
-x the Mopalla Suite Room and the threat on his life made
by Nacague and Chief Mate Reynaldo Doroon after he found the drug
DECISION paraphernalia.

CARPIO, J.: On 15 February 2003, Sulpicio Lines sent a notice of investigation

The Case to Nacague informing him of the charges against him for use of illegal
drugs and threatening a co-employee.

This is a petition for review of the 23 January 2006 Decision and 19

April 2006 Resolution of the Court of Appeals in CA-G.R. CEB SP No. When the ship docked in the port of Manila on 18 February 2003,

01065. In its 23 January 2006 Decision, the Court of Appeals some crew members of the ship, together with Nacague, were

dismissed the petition for certiorari filed by petitioner subjected to a random drug test. They were taken to

Jeffrey Nacague (Nacague) and affirmed the 21 March 2005 Decision S.M. Lazo Medical Clinic (S.M. Lazo Clinic) and were required to

and 31 May 2005 Resolution of the National Labor Relations submit urine samples. The result of the random drug test revealed

Commission (NLRC) in NLRC Case No. V-000481-04. In its 19 April that Nacague was positive for methamphetamine hydrochloride

2006 Resolution, the Court of Appeals denied Nacagues motion for or shabu.

reconsideration.
 WHEREFORE, premises considered, judgment is
On 20 February 2003, Sulpicio Lines subjected Nacague to a formal
hereby rendered ordering the
investigation. Nacague denied using illegal drugs. respondent Sulpicio Lines, Inc. to pay complainant
Jeffrey Nacague the following:

On 23 February 2003, Nacague went to Chong Hua Hospital in Cebu Separation pay P75,600.00
City to undergo a voluntary drug test. The drug test with Backwages P77,415.00
Total P153,015.00
Chong Hua Hospital yielded a negative result. Nacague submitted
this test result to Sulpicio Lines. The other claims are dismissed for lack of merit.

However, on 7 March 2003, Sulpicio Lines sent a memorandum
to Nacague terminating him from the service. The memorandum
reads:
After a careful consideration of your case with the
evidence available, including your explanation, and
with the positive drug test result, management finds
you culpable of grave misconduct and loss of trust
and confidence.
SO ORDERED.
According to the Labor Arbiter, the termination of employment of
employees found positive for using illegal drugs should not be
exercised indiscriminately and thoughtlessly. The Labor Arbiter
agreed with Nacague that the drug test result from S.M. Lazo Clinic
was questionable because the clinic is not accredited by the

In view thereof, the company is constrained to Dangerous Drug Board and not under its supervision. The Labor
terminate your employment effective today, March 7, Arbiter gave more weight to the drug test performed by
2003.
Chong Hua Hospital because it was accredited by the Dangerous
Drug Board. The Labor Arbiter said that doubts must be resolved in
favor of the employee. The Labor Arbiter also ruled that reinstatement
Feeling aggrieved, Nacague filed a complaint for illegal suspension,
is no longer viable due to the strained relations
illegal dismissal and for reinstatement with backwages.
between Nacague and Sulpicio Lines and, thus, awarded separation
pay to Nacague.
On 12 November 2003, Labor Arbiter Ernesto F. Carreon rendered a
decision in favor of Nacague and declared that Sulpicio Lines illegally
Dissatisfied with the Labor Arbiters Decision, Sulpicio Lines appealed
dismissed Nacague. The dispositive portion of the Labor Arbiters 12
to the NLRC. In its 21 March 2005 Decision, the NLRC reversed the
November 2003 Decision reads:
Labor Arbiters decision and dismissed Nacagues complaint for lack of Court of Appeals declared that the evidence presented
merit. by Sulpicio Lines was sufficient to justify the conclusion
that Nacague committed serious misconduct and a breach of trust and
According to the NLRC, since Nacague, who was performing a task confidence warranting his dismissal from employment. The Court of
involving trust and confidence, was found positive for using illegal Appeals agreed with the NLRC that Nacague failed to prove his
drugs, he was guilty of serious misconduct and loss of trust and allegation that S.M. Lazo Clinic lacks accreditation. On the procedural
confidence. The NLRC added that Sulpicio Lines Code of Conduct requirements, the Court of Appeals found that Sulpicio Lines complied
specified that the penalty for the use and illegal possession of with the twin-notice requirements and conducted a formal hearing.
prohibited drugs is dismissal. The NLRC also said that there is a
presumption that S.M. Lazo Clinic is an accredited drug testing center Nacague filed a motion for reconsideration. In its 19 April 2006
and that it was incumbent upon Nacague to show otherwise. Resolution, the Court of Appeals denied the motion.

Nacague filed a motion for reconsideration. In its 31 May 2005 Hence, this petition.
Resolution, the NLRC denied Nacagues motion.

Nacague filed a petition for certiorari with the Court of

Appeals. Nacague alleged that the NLRC gravely abused its
discretion when it declared that Sulpicio Lines validly terminated his The Issue
employment.
Nacague raises the sole issue of whether the Court of Appeals erred
in ruling that his termination from employment was valid.
The Ruling of the Court of Appeals
The Ruling of the Court
According to the Court of Appeals, Sulpicio Lines complied with both
the procedural and substantive requirements of the law when it The petition is meritorious.
terminated the employment of Nacague. The Court of Appeals said
that the positive result of the S.M. Lazo Clinic drug test was the main Nacague maintains that the S.M. Lazo Clinic drug test was not
basis of Sulpicio Lines in terminating Nacaguesemployment. The credible because Sulpicio Lines failed to show that S.M. Lazo Clinic is
an authorized drug testing center. Nacague also alleges that the urine
samples were gathered carelessly without proper labels to identify
their owners and that S.M. Lazo Clinic did not ask Nacague if he was
taking any medication that might alter the results of the drug
test. Nacague adds that Republic Act No. 9165 (R.A. No. 9165) and
the Department of Labor and Employment Order No. 53-03
(Department Order No. 53-03) require two drug tests a screening test
and a confirmatory test. Nacague maintains that, since only a
screening test was conducted, he was illegally dismissed based on an
incomplete drug test. Nacague argues that Sulpicio Lines failed to
discharge its burden of proving that the termination of his employment
was legal.
On the other hand, Sulpicio Lines questions the belated attempt
of Nacague to question the credibility of
S.M. Lazo Clinic. Sulpicio Lines also argues that since Nacague knew
that the residue of the drug would no longer be detectable in his body
after five days, Nacague underwent another drug test with the
Chong HuaHospital. Sulpicio Lines insists that the most accurate drug
test is the random drug test conducted by S.M. Lazo Clinic and that
the test with Chong Hua Hospital was a planned test.
Under Article 279 of the Labor Code, an employer may terminate the
services of an employee for just causes or for authorized causes.
Furthermore, under Article 277(b) of the Labor Code, the employer
must send the employee who is about to be terminated, a written
notice stating the causes for termination and must give the employee
the opportunity to be heard and to defend himself. Thus, to constitute
valid dismissal from employment, two requisites must concur: (1) the
dismissal must be for a just or authorized cause; and (2) the employee
must be afforded an opportunity to be heard and to defend himself.
Contrary to Sulpicio Lines allegation, Nacague was already
questioning the credibility of S.M. Lazo Clinic as early as the
proceedings before the Labor Arbiter. In fact, the Labor Arbiter
declared that the S.M. Lazo Clinic drug test result was doubtful since
it is not under the supervision of the Dangerous Drug Board.
The NLRC and the Court of Appeals ruled that Sulpicio Lines validly
terminated Nacagues employment because he was found guilty of
using illegal drugs which constitutes serious misconduct and loss of
trust and confidence. However, we find that Sulpicio Lines failed to
clearly show that Nacague was guilty of using illegal drugs. We agree
with the Labor Arbiter that the lack of accreditation of S.M. Lazo Clinic
made its drug test results doubtful.
Section 36 of R.A. No. 9165 provides that drug tests shall be
performed only by authorized drug testing centers. Moreover, Section
36 also prescribes that drug testing shall consist of both the screening
test and the confirmatory test. Section 36 of R.A. No. 9165 reads:
SEC. 36. Authorized Drug Testing. Authorized drug
testing shall be done by any government forensic
laboratories or by any of the drug testing
laboratories accredited and monitored by the
DOH to safeguard the quality of test results. The
DOH shall take steps in setting the price of the drug
test with DOH accredited drug testing centers to
 further reduce the cost of such drug test. The drug
testing shall employ, among others, two (2) testing
methods, the screening test which will determine the
positive result as well as the type of drug used and
the confirmatory test which will confirm a positive
screening test. x x x (Emphasis supplied)
Department Order No. 53-03 further provides:
Drug Testing Program for Officers and Employees
Drug testing shall
conform with the procedures as
prescribed by the Department of
Health (DOH)
(www.doh.gov.ph). Only drug
testing centers accredited by the
DOH shall be utilized. A list of
accredited centers may be accessed
through the OSHC website
(www.oshc.dole.gov.ph).
Drug testing shall consist of
both the screening test and the
confirmatory test; the latter to be
carried out should the screening
test turn positive. The employee
concerned must be informed of the
test results whether positive or
negative. (Emphasis supplied)
In Social Justice Society v. Dangerous Drugs Board, we explained:
As to the mechanics of the test, the law specifies that
the procedure shall employ two testing methods, i.e.,
the screening test and the confirmatory test,
doubtless to ensure as much as possible the
trustworthiness of the results. But the more important
consideration lies in the fact that the tests shall be
conducted by trained professionals in access-
controlled laboratories monitored by the Department
of Health (DOH) to safeguard against results
tampering and to ensure an accurate chain of
custody.
The law is clear that drug tests shall be performed only by authorized
drug testing centers. In this case, Sulpicio Lines failed to prove that
S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines
did not even deny Nacagues allegation that S.M. Lazo Clinic was not
accredited. Also, only a screening test was conducted to determine
if Nacague was guilty of using illegal drugs. Sulpicio Lines did not
confirm the positive result of the screening test with a confirmatory
test.Sulpicio Lines failed to indubitably prove that Nacague was guilty
of using illegal drugs amounting to serious misconduct and loss of
trust and confidence. SulpicioLines failed to clearly show that it had a
valid and legal cause for terminating Nacagues employment. When
the alleged valid cause for the termination of employment is not clearly
proven, as in this case, the law considers the matter a case of illegal
dismissal.
We agree with the Labor Arbiter that Nacagues reinstatement is no
longer feasible due to strained relations
between Nacague and Sulpicio Lines and that Nacagueshould
instead be granted separation pay.
WHEREFORE, we GRANT the petition. We SET ASIDE the 23
January 2006 Decision and the 19 April 2006 Resolution of the
Court of Appeals in CA-G.R. CEB SP No.
01065. We REINSTATE the 12 November 2003 Decision of the Labor
Arbiter.

SO ORDERED.

THIRD DIVISION
[G.R. No. 115795. March 6, 1998]
JOSE S. SANTOS, JR., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, HAGONOY INSTITUTE INC.,
ITS DIRECTRESS, MARTA B. ZUNIGA and PRINCIPAL B.
BANAG, respondent.
DECISION
ROMERO, J.:
It is to state the obvious that schools, next only to the home, wield
a weighty influence upon the students, especially during the latters
formative years, for it instills in them the values and mores which shall
prepare them to discharge their rightful responsibilities as mature
individuals in society. At the vanguard in nurturing their growth are the
teachers who are directly charged with rearing and educating
them. As such, a teacher serves as a role model for his
students. Corollarily, he must not bring the teaching profession into
public disrespect or disgrace.[1] For failure to live up to the exacting
moral standards demanded by his profession, petitioner Jose Santos
was dismissed from his employment on the ground of immorality. We
uphold his dismissal.
The following facts are hereunder narrated.
Petitioner, a married man, was employed as a teacher by the
private respondent Hagonoy Institute Inc. from June 1980 until his
dismissal on June 1, 1991. Likewise working as a teacher for the
private respondent was Mrs. Arlene T. Martin, also married. In the
course of their employment, the couple fell in love. Thereafter, rumors
regarding the couples relationship spread, especially among the
faculty members and school officials.
Concerned about the rumors, on November 3, 1990, the private
respondent advised Mrs. Martin to take a leave of absence which she
ignored, as she continued to report for work. Consequently, on
November 9, 1990, she was barred from reporting for work and was
not allowed to enter the private respondents premises, effectively
dismissing her from her employment.
In view of her termination from the service, on November 13,
1990, Mrs. Martin filed a case for illegal dismissal before the NLRC
Regional Arbitration Branch No. III, San Fernando,
Pampanga[2] against the private respondent. After the parties had
submitted their respective evidence and position paper, Labor Arbiter
Ariel Santos rendered a decision dismissing the complaint, the
dispositive part of which states:
WHEREFORE, the complaint filed by the complainant Arlene Martin
is hereby DISMISSED for utter lack of merit.
However, considering the length of service of complaint and for
humanitarian reason she would be given financial assistance based
on one-month pay on every year of service.
On appeal, the NLRC in a decision dated February 26, 1993,
reversed the labor arbiters ruling, the dispositive portion of the
decision[3] reads:
WHEREFORE, the appealed Decision is hereby SET ASIDE and
VACATED. Another one ENTERED ordering respondent to pay
complainant her backwages and separation pay in the total amount
of P83,392.40. Complainants other claims are hereby DISMISSED
for lack of merit.
SO ORDERED.
The reversal was anchored on the failure by the private
respondent, in dismissing Mrs. Martin, to accord her the necessary
procedural due process.[4]
 Meanwhile, private respondent set up a committee to investigate
the veracity of the rumors. After two weeks of inquiry, the committee
rendered its report confirming the illicit relationship between the
petitioner and Mrs. Martin.[5]
In view of the committees finding, on December 19, 1990,
petitioner was charged administratively for immorality and was
required to present his side on the controversy.Five months later or in
May 1991, petitioner was informed by the private respondents Board
of Directors of his dismissal effective June 1, 1991.[6] Unable to accept
such verdict, petitioner filed a complaint for illegal dismissal on August
12, 1991 before the NLRC Regional Arbitration Branch No. III, San
Fernando, Pampanga. After a full blown trial was conducted, Labor
Arbiter Quintin C. Mendoza rendered a decision dated January 12,
1993, dismissing petitioners complaint but at the same time awarding
monetary sums as financial assistance, the dispositive portion of
which reads, thus:
WHEREFORE, judgement is hereby issued dismissing the
complaint, but ordering respondent Hagonoy Institute Inc. and/or
Mrs. Elisea B. Banag (respondent Principal) or Mrs. Marta B. Zuniga
(respondent Directress) to pay complainant (petitioner) the sum of
thirteen thousand and seven hundred fifty (P13,750.00) pesos (as
financial assistance), the rest of the complaint being hereby
dismissed for lack of basis or merit.
SO ORDERED.
In an effort to seek the reversal of the labor arbiters decision,
petitioner filed an appeal before the NLRC, which, however, did not
find any substantial reason to overturn the labor arbiters ruling. Thus,
in a decision[7] dated November 29, 1993, the NLRC dismissed the
appeal, to wit:
WHEREFORE, premises considered, the instant appeal should be,
as it is hereby, dismissed for lack of merit.
SO ORDERED.
Petitioners motion for reconsideration suffered the same
fate.[8] Thus, this petition for certiorari under Rule 65 of the Rules of
Court.
We hereby uphold the NLRCs finding dismissing petitioner from
his employment.
The crux of the controversy is whether the illicit relationship
between the petitioner and Mrs. Martin could be considered immoral
as to constitute just cause to terminate an employee under Article 282
of the Labor Code.
We have consistently held that in order to constitute a valid
dismissal, two requisites must concur: (a) the dismissal must be for
any of the causes expressed in Art. 282 of the Labor Code, and (b)
the employee must be accorded due process, basic of which are the
opportunity to be heard and defend himself.[9]
Under Article 282 of the Labor Code, as amended, the following
are deemed just causes to terminate an employee:
(a) Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative in connection with
his work;
(b) Gross and habitual neglect by the employee of his duties:
(c) Fraud or willfull breach by the employee of the trust reposed in
him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his
duly authorize representative; and
(e) Other causes analogous to the foregoing.
Moreover, it is provided inter alia under Section 94[10] of the
Manual of Regulations for Private Schools:
Section 94. Causes of Terminating Employment. In addition to the
just cases enumerated in the Labor Code, the employment of school
personnels, including faculty, may be terminated for any of the
following causes:
xxx xxx xxx
E. Disgraceful or immoral conduct.
Private respondent, in justifying the termination of the petitioner,
contends that being a teacher, he must live up to the high moral
standards required of his position. In other words, it asserts that its
purpose in dismissing the petitioner was to preserve the respect of the
community towards the teachers and to strengthen the educational
system.[11]
On the other hand, petitioner merely argues that the alleged illicit
relationship was not substantially proven by convincing evidence by
the private respondent as to justify his dismissal.
On the outset, it must be stressed that to constitute immorality,
the circumstances of each particular case must be holistically
considered and evaluated in light of the prevailing norms of conduct
and applicable laws.[12] American jurisprudence has defined
immorality as a course of conduct which offends the morals of the
community and is a bad example to the youth whose ideals a teacher
is supposed to foster and to elevate,[13] the same including sexual
misconduct.[14] Thus, in petitioners case, the gravity and seriousness
of the charges against him stem from his being a married man and at
the same time a teacher.
We cannot overemphasize that having an extra-marital affair is
an afront to the sanctity of marriage, which is a basic institution of
society. Even our Family Code provides that husband and wife must
live together, observe mutual love, respect and fidelity. [15] This is
rooted in the fact that both our Constitution and our laws cherish the
validity of marriage and unity of the family. [16] Our laws, in
implementing this constitutional edict on marriage and the family
underscore their permanence, inviolability and solidarity. [17]
As a teacher, petitioner serves as an example to his pupils,
especially during their formative years[18] and stands in loco
parentis to them.[19] To stress their importance in our society, teachers
are given substitute and special parental authority under our laws.[20]
Consequently, it is but stating the obvious to assert that teachers
must adhere to the exacting standards of morality and decency. There
is no dichotomy of morality. A teacher, both in his official and personal
conduct, must display exemplary behavior. He must freely and
willingly accept restrictions on his conduct that might be viewed
irksome by ordinary citizens. In other words, the personal behavior of
teachers, in and outside the classroom, must be beyond reproach.
Accordingly, teachers must abide by a standard of personal
conduct which not only proscribes the commission of immoral acts,
but also prohibits behavior creating a suspicion of immorality because
of the harmful impression it might have on the students. [21] Likewise,
they must observe a high standard of integrity and honesty.[22]
From the foregoing, it seems obvious that when a teacher
engages in extra-marital relationship, especially when the parties are
both married, such behavior amounts to immorality, justifying his
termination from employment.[23]
Having concluded that immorality is a just cause for dismissing
petitioner, it is imperative that the private respondent prove the
same. Since the burden of proof rests upon the employer to show that
the dismissal was for a just and valid cause,[24] the same must be
supported by substantial evidence.[25]
Undoubtedly, the question of immorality by the petitioner is
factual in nature. Thus, we reiterate the well-settled rule that factual
findings by the NLRC, particularly when it coincides with those by the
Labor Arbiter, are accorded respect, even finality, and will not be
disturbed for as long as such findings are supported by substantial
evidence.[26] A scrutiny of the records of the instant petition leads us
to concur with the NLRCs finding that petitioner indeed entered into
an illicit relationship with his co-teacher. This fact was attested to by
the testimonies of nine witnesses (a fourth year student, a security
guard, a janitor and six co-teachers) which petitioner failed to rebut.
 In fact, the petitioners only recourse was to deny the accusation
and insinuate that these witnesses were coerced by the private
respondent to give their testimonies.However, under such
circumstances, it is not enough for petitioner to simply cast doubt on
the motives of the witnesses; he must present countervailing evidence
to prove that no such affair took place.
In short, we cannot just ignore the witnesses affidavits and their
subsequent testimonies during the investigation as to the culpability of
the petitioner on the sole basis of the latters denial. In any event, we
have held that denial, if unsubstantiated by clear and convincing
evidence, is a negative and self-serving evidence which has no weight
in law and cannot be given greater evidentiary value over the
testimony of credible witnesses who testified on affirmative matters. [27]
Further bolstering the witnesses testimonies is the the absence
of any motive on their part to falsely testify against the petitioner. Thus,
since there is nothing to indicate that the witnesses were moved by
dubious or improper motives to testify falsely against the petitioner,
their testimonies are hereby accorded full faith and credit.
Likewise, petitioner cannot take comfort from the letter dated
November 7, 1990 signed by 28 of his co-teachers, expressing their
unequivocal support for Mrs. Arlene Martin.[28] It must be noted that
the said letter did not in any way absolve Mrs. Martin from any
wrongdoing. It merely affirmed the fact that when she was forcibly
asked to take a leave of absence on November 3, 1990 the same was
done in a precipitous manner, without the benefit of due
process. Moreover, it must be stressed that the expression of support
was personal to Mrs. Martin, and the same should not redound to the
benefit of the petitioner. Indeed, if petitioner really had the support of
his peers, then it should have been easy for him to obtain a similar
letter from them in the course of his administrative
investigation. However, not only did he not get such support, but six
of his co-teachers even testified against him during the inquiry.
Finally, petitioner cannot invoke in his favor the ruling in
the Arlene Martin case, wherein the NLRC ruled that her dismissal
was illegal. It must be noted that the reason for declaring Martins
dismissal as illegal was the failure by the private respondent to accord
her the required due process.[29]
As aptly observed by the NLRC in its decision:[30]
In the case at bar, the complainant was amply afforded the due
process requirements of law. He was dismissed only on June 1,
1991 after an exhaustive investigation. A committee was formed to
conduct an inquiry. (Rollo, pp. 43-44) An administrative charge for
immorality was filed against him. (Rollo, p. 45) He was even required
to testify in said case. (Rollo, p. 46) He was given the opportunity to
answer said accusation. (Rollo, p. 47) He was in fact present during
the hearing on January 17, 1991 and gave his side. x x x In fine,
herein complainant (petitioner) cannot successfully seek refuge in
the cited case of Martin. (Rollo, pp. 48-49)
In view of our finding that petitioners dismissal was for a just and
valid cause, the grant of financial assistance by the NLRC is without
any factual and legal basis. In PLDT v. NLRC, [31] we held that:
We hold henceforth separation pay shall be as a measure of social
justice only in these instances where the employee is validly
dismissed for cause other than serious misconduct or those
reflecting his moral character. Where the reason for the valid
dismissal is, for example, habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual relationship with a fellow
worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other
name it is called, on the ground of social justice.
The above ruling has consistently been applied in terminating an
employee when it involves his moral character.[32]
WHEREFORE, in view of the foregoing, the petition is hereby
DISMISSED. The questioned Resolution dated March 8, 1994 and the
decision of the National Labor Relations Commission dated November
29, 1993, are AFFIRMED with the MODIFICATION deleting the
financial assistance granted to petitioner in the amount of P13,750.00.
Costs against petitioner.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 187226 January 28, 2015
CHERYLL SANTOS LEUS, Petitioner,
vs.
ST. SCHOLASTICA'S COLLEGE WESTGROVE and/or SR.
EDNA QUIAMBAO, OSB, Respondents.
DECISION
REYES, J.:
Cheryll Santos Leus (petitioner) was hired by St. Scholastica's
College Westgrove (SSCW), a Catholic educational institution, as
a non-teaching personnel, engaged in pre-marital sexual
relations, got pregnant out of wedlock, married the father of her
child, and was dismissed by SSCW, in that order. The question
that has to be resolved is whether the petitioner's conduct
constitutes a ground for her dismissal.
Before this Court is a petition for review on certiorari under Rule
45 of the Rules of Court seeking to annul and set aside the
Decision1 dated September 24, 2008 and Resolution2 dated
March 2, 2009 issued by the Court of Appeals (CA) in CA-G.R.
SP No. 100188, which affirmed the Resolutions dated February
28, 20073 and May 21, 20074 of the National Labor Relations
Commission (NLRC)in NLRC CA No. 049222-06.
The Facts
SSCW is a catholic and sectarian educational institution in Silang,
Cavite. In May 2001, SSCW hired the petitioner as an Assistant
to SSCW’s Director of the Lay Apostolate and Community
Outreach Directorate.
Sometime in 2003, the petitioner and her boyfriend conceived a
child out of wedlock. When SSCW learned of the petitioner’s
pregnancy, Sr. Edna Quiambao (Sr. Quiambao), SSCW’s
Directress, advised her to file a resignation letter effective June 1,
2003. In response, the petitioner informed Sr. Quiambao that she
would not resign from her employment just because she got
pregnant without the benefit of marriage.5
On May 28, 2003, Sr. Quiambao formally directed the petitioner
to explain in writing why she should not be dismissed for
engaging in pre-marital sexual relations and getting pregnant as a
result thereof, which amounts to serious misconduct and conduct
unbecoming of an employee of a Catholic school.6
In a letter7 dated May 31, 2003, the petitioner explained that her
pregnancy out of wedlock does not amount to serious misconduct
or conduct unbecoming of an employee. She averred that she is
unaware of any school policy stating that being pregnant out of
wedlock is considered as a serious misconduct and, thus, a
ground for dismissal. Further, the petitioner requested a copy of
SSCW’s policy and guidelines so that she may better respond to
the charge against her. On June 2, 2003, Sr. Quiambao informed
the petitioner that, pending the promulgation of a "Support Staff
Handbook," SSCW follows the 1992 Manual of Regulations for
Private Schools (1992 MRPS) on the causes for termination of
employments; that Section 94(e) of the 1992 MRPS cites
"disgraceful or immoral conduct" as a ground for dismissal in
addition to the just causes for termination of employment
provided under Article 282 of the Labor Code.8
On June 4, 2003, the petitioner, through counsel, sent Sr.
Quiambao a letter,9 which, in part, reads:
To us, pre-marital sex between two consenting adults without
legal impediment to marry each other who later on married each
other does not fall within the contemplation of "disgraceful or
immoral conduct" and "serious misconduct" of the Manual of
Regulations for Private Schools and the Labor Code of the
Philippines.
Your argument that what happened to our client would set a bad
example to the students and other employees of your school is
speculative and is more imaginary than real. To dismiss her on
that sole ground constitutes grave abuse of management
prerogatives.
Considering her untarnished service for two years, dismissing her
with her present condition would also mean depriving her to be
more secure in terms of financial capacity to sustain maternal
needs.10
In a letter11 dated June 6, 2003, SSCW, through counsel,
maintained that pre-marital sexual relations, evenif between two
consenting adults without legal impediment to marry, is
considered a disgraceful and immoral conduct or a serious
misconduct, which are grounds for the termination of employment
under the 1992 MRPS and the Labor Code. That SSCW, as a
Catholic institution of learning, has the right to uphold the
teaching of the Catholic Church and expect its employees to
abide by the same. They further asserted that the petitioner’s
indiscretion is further aggravated by the fact that she is the
Assistant to the Director of the Lay Apostolate and Community
Outreach Directorate, a position of responsibility that the students
look up to as rolemodel. The petitioner was again directed to
submit a written explanation on why she should not be dismissed.
On June 9, 2003, the petitioner informed Sr. Quiambao that she
adopts her counsel’s letter dated June 4, 2003 as her written
explanation.12
Consequently, in her letter13 dated June 11, 2003, Sr. Quiambao
informed the petitioner that her employment with SSCW is
terminated on the ground of serious misconduct. She stressed
that pre-marital sexual relations between two consenting adults
with no impediment to marry, even if they subsequently married,
amounts to immoral conduct. She further pointed out that SSCW
finds unacceptable the scandal brought about by the petitioner’s
pregnancy out of wedlock as it ran counter to the moral principles
that SSCW stands for and teaches its students.
Thereupon, the petitioner filed a complaint for illegal dismissal
with the Regional Arbitration Branch of the NLRC in Quezon City
against SSCW and Sr. Quiambao (respondents). In her position
paper,14 the petitioner claimed that SSCW gravely abused its
management prerogative as there was no just cause for her
dismissal. She maintained that her pregnancy out of wedlock
cannot be considered as serious misconduct since the same is a
purely private affair and not connected in any way with her duties
as an employee of SSCW. Further, the petitioner averred that she
and her boyfriend eventually got married even prior to her
dismissal.
For their part, SSCW claimed that there was just cause to
terminate the petitioner’s employment with SSCW and that the
same is a valid exercise of SSCW’s management prerogative.
They maintained that engaging in pre-marital sex, and getting
pregnant as a result thereof, amounts to a disgraceful or immoral
conduct, which is a ground for the dismissal of an employee
under the 1992 MRPS.
They pointed out that SSCW is a Catholic educational institution,
which caters exclusively to young girls; that SSCW would lose its
credibility if it would maintain employees who do not live up to the
values and teachings it inculcates to its students. SSCW further
asserted that the petitioner, being an employee of a Catholic
educational institution, should have strived to maintain the honor,
dignity and reputation of SSCW as a Catholic school.15
 The Ruling of the Labor Arbiter
On February 28, 2006, the Labor Arbiter (LA) rendered a
Decision,16 in NLRC Case No. 6-17657-03-C which dismissed the
complaint filed by the petitioner. The LA found that there was a
valid ground for the petitioner’s dismissal; that her pregnancy out
of wedlock is considered as a "disgraceful and immoral conduct."
The LA pointed out that, as an employee of a Catholic
educational institution, the petitioner is expected to live up to the
Catholic values taught by SSCW to its students. Likewise, the LA
opined that:
Further, a deep analysis of the facts would lead us to disagree
with the complainant that she was dismissed simply because she
violate[d] a Catholic [teaching]. It should not be taken in isolation
but rather it should be analyzed in the lightof the surrounding
circumstances as a whole. We must also take into [consideration]
the nature of her work and the nature of her employer-school. For
us, it is not just an ordinary violation. It was committed by the
complainant in an environment where her strict adherence to the
same is called for and where the reputation of the school is at
stake. x x x.17
The LA further held that teachers and school employees, both in
their official and personal conduct, must display exemplary
behavior and act in a manner that is beyond reproach.
The petitioner appealed to the NLRC, insisting that there was no
valid ground for the termination of her employment. She
maintained that her pregnancy out of wedlock cannot be
considered as "serious misconduct" under Article 282 of the
Labor Code since the same was not of such a grave and
aggravated character. She asserted that SSCW did not present
any evidence to establish that her pregnancy out of wedlock
indeed eroded the moral principles that it teaches its students.18
The Ruling of the NLRC
On February 28, 2007, the NLRC issued a Resolution,19 which
affirmed the LA Decision dated February 28, 2006. The NLRC
pointed out that the termination of the employment of the
personnel of private schools is governed by the 1992 MRPS; that
Section 94(e) thereof cites "disgraceful or immoral conduct" as a
just cause for dismissal, in addition to the grounds for termination
of employment provided for under Article 282 of the Labor Code.
The NLRC held that the petitioner’s pregnancy out of wedlock is a
"disgraceful or immoral conduct" within the contemplation of
Section 94(e) of the 1992 MRPS and, thus, SSCW had a valid
reason to terminate her employment.
The petitioner sought reconsideration20 of the Resolution dated
February 28, 2007 but it was denied by the NLRC in its
Resolution21 dated May 21, 2007.
Unperturbed, the petitioner filed a petition22 for certiorari with the
CA, alleging that the NLRC gravely abused its discretion in ruling
that there was a valid ground for her dismissal. She maintained
that pregnancy out of wedlock cannot be considered as a
disgraceful or immoral conduct; that SSCW failed to prove that its
students were indeed gravely scandalized by her pregnancy out
of wedlock. She likewise asserted that the NLRC erred in
applying Section 94(e) of the 1992 MRPS.
The Ruling of the CA
On September 24, 2008, the CA rendered the herein assailed
Decision,23 which denied the petition for certiorari filed by the
petitioner. The CA held that it is the provisions of the 1992 MRPS
and not the Labor Code which governs the termination of
employment of teaching and non-teaching personnel of private
schools, explaining that:
It is a principle of statutory construction that where there are two
statutes that apply to a particular case, that which was specially
intended for the said case must prevail. Petitioner was employed
by respondent private Catholic institution which undeniably
follows the precepts or norms of conduct set forth by the Catholic
Church. Accordingly, the Manual of Regulations for Private
Schools followed by it must prevail over the Labor Code, a
general statute. The Manual constitutes the private schools’
Implementing Rules and Regulations of Batas Pambansa Blg.
232 or the Education Act of 1982. x x x.24
The CA further held that the petitioner’s dismissal was a valid
exercise of SSCW’s management prerogative to discipline and
impose penalties on erring employees pursuant toits policies,
rules and regulations. The CA upheld the NLRC’s conclusion that
the petitioner’s pregnancy out of wedlock is considered as a
"disgraceful and immoral conduct" and, thus, a ground for
dismissal under Section 94(e) of the 1992 MRPS. The CA
likewise opined that the petitioner’s pregnancy out of wedlock is
scandalous per segiven the work environment and social milieu
that she was in, viz:
Under Section 94 (e) of the [MRPS], and even under Article 282
(serious misconduct) of the Labor Code, "disgraceful and immoral
conduct" is a basis for termination of employment.
xxxx
Petitioner contends that her pre-marital sexual relations with her
boyfriend and her pregnancy prior to marriage was not
disgraceful or immoral conduct sufficient for her dismissal
because she was not a member of the school’s faculty and there
is no evidence that her pregnancy scandalized the school
community.
We are not persuaded. Petitioner’s pregnancy prior to marriage is
scandalous in itself given the work environment and social milieu
she was in. Respondent school for young ladies precisely seeks
to prevent its students from situations like this, inculcating in them
strict moral values and standards. Being part of the institution,
petitioner’sprivate and public life could not be separated. Her
admitted pre-marital sexual relations was a violation of private
respondent’s prescribed standards of conduct that views pre-
marital sex as immoral because sex between a man and a
woman must only take place within the bounds of marriage.
Finally, petitioner’s dismissal is a valid exercise of the employer-
school’s management prerogative to discipline and impose
penalties on erring employees pursuant to its policies, rules and
regulations. x x x.25 (Citations omitted)
The petitioner moved for reconsideration26 but it was denied by
the CA in its Resolution27 dated March 2, 2009.
Hence, the instant petition.
Issues
Essentially, the issues set forth by the petitioner for this Court’s
decision are the following: first, whether the CA committed
reversible error in ruling that it is the 1992 MRPS and not the
Labor Code that governs the termination of employment of
teaching and non-teaching personnel of private schools; and
second, whether the petitioner’spregnancy out of wedlock
constitutes a valid ground to terminate her employment.
The Ruling of the Court
The Court grants the petition.
First Issue: Applicability of the 1992 MRPS
The petitioner contends that the CA, in ruling that there was a
valid ground to dismiss her, erred in applying Section 94 of the
1992 MRPS. Essentially, she claims that the 1992 MRPS was
issued by the Secretary of Education as the revised implementing
rules and regulations of Batas Pambansa Bilang 232 (BP 232) or
the "Education Act of 1982." That there is no provision in BP 232,
which provides for the grounds for the termination of employment
of teaching and non-teaching personnel of private schools. Thus,
Section 94 of the 1992 MRPS, which provides for the causes of
terminating an employment, isinvalid as it "widened the scope
and coverage" of BP 232.
The Court does not agree.
The Court notes that the argument against the validity of the 1992
MRPS, specifically Section 94 thereof, is raised by the petitioner
for the first time in the instant petition for review. Nowhere in the
proceedings before the LA, the NLRC or the CA did the petitioner
assail the validity of the provisions of the 1992 MRPS.
"It is well established that issues raised for the first time on
appeal and not raised in the proceedings in the lower court are
barred by estoppel. Points of law, theories, issues, and
arguments not brought to the attention of the trial court ought not
to be considered by a reviewing court, as these cannot be raised
for the first time on appeal. To consider the alleged facts and
arguments belatedly raised would amount to trampling on the
basic principles of fair play, justice, and due process."28
In any case, even if the Court were to disregard the petitioner’s
belated claim of the invalidity of the 1992 MRPS, the Court still
finds the same untenable.
The 1992 MRPS, the regulation in force at the time of the instant
controversy, was issued by the Secretary of Education pursuant
to BP 232. Section 7029 of BP 232 vests the Secretary of
Education with the authority to issue rules and regulations to
implement the provisions of BP 232. Concomitantly, Section
5730 specifically empowers the Department of Education to
promulgate rules and regulations necessary for the
administration, supervision and regulation of the educational
system in accordance with the declared policy of BP 232.
The qualifications of teaching and non-teaching personnel of
private schools, as well as the causes for the termination of their
employment, are an integral aspect of the educational system of
private schools. Indubitably, ensuring that the teaching and non-
teaching personnel of private schools are not only qualified, but
competent and efficient as well goes hand in hand with the
declared objective of BP 232 – establishing and maintaining
relevant quality education.31 It is thus within the authority of the
Secretary of Education to issue a rule, which provides for the
dismissal of teaching and non-teaching personnel of private
schools based on their incompetence, inefficiency, or some other
disqualification.
Moreover, Section 69 of BP 232 specifically authorizes the
Secretary of Education to "prescribe and impose such
administrative sanction as he may deem reasonable and
appropriate in the implementing rules and regulations" for the
"[g]ross inefficiency of the teaching or non-teaching personnel" of
private schools.32 Accordingly, contrary to the petitioner’s claim,
the Court sees no reason to invalidate the provisions of the 1992
MRPS, specifically Section 94 thereof. Second Issue: Validity of
the Petitioner’s Dismissal
The validity of the petitioner’s dismissal hinges on the
determination of whether pregnancy out of wedlock by an
employee of a catholic educational institution is a cause for the
termination of her employment.
In resolving the foregoing question,the Court will assess the
matter from a strictly neutral and secular point of view – the
relationship between SSCW as employer and the petitioner as an
employee, the causes provided for by law in the termination of
suchrelationship, and the evidence on record. The ground cited
for the petitioner’s dismissal, i.e., pre-marital sexual relations and,
consequently, pregnancy outof wedlock, will be assessed as to
whether the same constitutes a valid ground for dismissal
pursuant to Section 94(e) of the 1992 MRPS.
The standard of review in a Rule 45 The labor tribunals’ respective
petition from the CA decision in conclusions that the petitioner’s
labor cases. pregnancy is a "disgraceful or
immoral conduct" were arrived at
In a petition for review under Rule 45 of the Rules of Court, such arbitrarily.
as the instant petition, where the CA’s disposition in a labor case
is sought to be calibrated, the Court’s review isquite limited. In The CA and the labor tribunals affirmed the validity of the
ruling for legal correctness, the Court has to view the CA decision petitioner’s dismissal pursuant to Section 94(e) of the 1992
in the same context that the petition for certiorari it ruled upon MRPS, which provides that:
was presented to it; the Court has to examine the CA decision
from the prism of whether it correctly determined the presence or Sec. 94. Causes of Terminating Employment – In addition to the
absence of grave abuse of discretion in the NLRC decision before just causes enumerated in the Labor Code, the employment of
it, not on the basis of whether the NLRC decision on the merits of school personnel, including faculty, may be terminated for any of
the case was correct.33 the following causes:

The phrase "grave abuse of discretion" is well-defined in the xxxx

Court’s jurisprudence. It exists where an act of a court or tribunal
is performed with a capricious or whimsical exercise ofjudgment e. Disgraceful or immoral conduct;
equivalent to lack of jurisdiction.34 The determination of the
presence or absence of grave abuse of discretion does not
xxxx
include an inquiry into the correctness of the evaluation of
evidence, which was the basis of the labor agency in reaching its
conclusion.35 The labor tribunals concluded that the petitioner’s pregnancy out
of wedlock, per se, is "disgraceful and immoral"considering that
she is employed in a Catholic educational institution. In arriving at
Nevertheless, while a certiorari proceeding does not strictly
such conclusion, the labor tribunals merely assessed the fact of
include an inquiry as to the correctness of the evaluation of
the petitioner’s pregnancy vis-à-visthe totality of the
evidence (that was the basis of the labor tribunals in determining
circumstances surrounding the same.
their conclusion), the incorrectness of its evidentiary evaluation
should not result in negating the requirement of substantial
evidence. Indeed, when there is a showing that the findings or However, the Court finds no substantial evidence to support the
conclusions, drawn from the same pieces of evidence, were aforementioned conclusion arrived at by the labor tribunals. The
arrived at arbitrarily or in disregard of the evidence on record, fact of the petitioner’s pregnancy out of wedlock, without more, is
they may be reviewed by the courts. In particular, the CA can not enough to characterize the petitioner’s conduct as disgraceful
grant the petition for certiorariif it finds that the NLRC, in its or immoral. There must be substantial evidence to establish that
assailed decision or resolution, made a factual finding not pre-marital sexual relations and, consequently, pregnancy outof
supported by substantial evidence. A decision that is not wedlock, are indeed considered disgraceful or immoral.
supported by substantial evidence is definitely a decision tainted
with grave abuse of discretion.36
The totality of the circumstances
surrounding the conduct alleged to
be disgraceful or immoral must be
assessed against the prevailing
norms of conduct.
In Chua-Qua v. Clave,37 the Court stressed that to constitute
immorality, the circumstances of each particular case must be
holistically considered and evaluated in light of the prevailing
norms of conductand applicable laws.38Otherwise stated, it is not
the totality of the circumstances surrounding the conduct per se
that determines whether the same is disgraceful or immoral, but
the conduct that is generally accepted by society as respectable
or moral. If the conduct does not conform to what society
generally views as respectable or moral, then the conduct is
considered as disgraceful or immoral. Tersely put, substantial
evidence must be presented, which would establish that a
particular conduct, viewed in light of the prevailing norms of
conduct, is considered disgraceful or immoral.
Thus, the determination of whether a conduct is disgraceful or
immoral involves a two-step process: first, a consideration of the
totality of the circumstances surrounding the conduct; and
second, an assessment of the said circumstances vis-à-visthe
prevailing norms of conduct, i.e., what the society generally
considers moral and respectable.
That the petitioner was employed by a Catholic educational
institution per se does not absolutely determine whether her
pregnancy out of wedlock is disgraceful or immoral. There is still
a necessity to determine whether the petitioner’s pregnancy out
of wedlock is considered disgraceful or immoral in accordance
with the prevailing norms of conduct.
Public and secular morality should
determine the prevailing norms of
conduct, not religious morality.
However, determining what the prevailing norms of conduct are
considered disgraceful or immoral is not an easy task. An
individual’s perception of what is moral or respectable is a
confluence of a myriad of influences, such as religion, family,
social status, and a cacophony of others. In this regard, the
Court’s ratiocination in Estrada v. Escritor39 is instructive.
In Estrada, an administrative case against a court interpreter
charged with disgraceful and immoral conduct, the Court stressed
that in determining whether a particular conduct can be
considered as disgraceful and immoral, the distinction between
public and secular morality on the one hand, and religious
morality, on the other, should be kept in mind.40 That the
distinction between public and secular morality and religious
morality is important because the jurisdiction of the Court extends
only to public and secular morality.41 The Court further explained
that:
The morality referred to in the law is public and necessarily
secular, not religiousx x x. "Religious teachings as expressed in
public debate may influence the civil public order but public moral
disputes may be resolved only on grounds articulable in secular
terms." Otherwise, if government relies upon religious beliefs in
formulating public policies and morals, the resulting policies and
morals would require conformity to what some might regard as
religious programs or agenda.The non-believers would therefore
be compelled to conform to a standard of conduct buttressed by a
religious belief, i.e., to a "compelled religion," anathema to
religious freedom. Likewise, if government based its actions upon
religious beliefs, it would tacitly approve or endorse that belief
and thereby also tacitly disapprove contrary religious or non-
religious views that would not support the policy. As a result,
government will not provide full religious freedom for all its
citizens, or even make it appear that those whose beliefs are
disapproved are second-class citizens. Expansive religious
freedom therefore requires that government be neutral in matters
of religion; governmental reliance upon religious justification is
inconsistent with this policy of neutrality.
In other words, government action, including its proscription of
immorality as expressed in criminal law like concubinage, must
have a secular purpose. That is, the government proscribes this
conduct because it is "detrimental (or dangerous) to those
conditions upon which depend the existence and progress of
human society" and not because the conduct is proscribed by the
beliefs of one religion or the other. Although admittedly, moral
judgments based on religion might have a compelling influence
on those engaged in public deliberations over what actions would
be considered a moral disapprobation punishable by law. After
all, they might also be adherents of a religion and thus have
religious opinions and moral codes with a compelling influence on
them; the human mind endeavors to regulate the temporal and
spiritual institutions of society in a uniform manner, harmonizing
earth with heaven. Succinctly put, a law could be religious or
Kantian or Aquinian or utilitarian in its deepest roots, but it must
have an articulable and discernible secular purpose and
justification to pass scrutiny of the religion clauses.x x
x.42(Citations omitted and emphases ours)
Accordingly, when the law speaks of immoral or, necessarily,
disgraceful conduct, it pertains to public and secular morality; it
refers to those conducts which are proscribed because they are
detrimental to conditions upon which depend the existence and
progress of human society. Thus, in Anonymous v. Radam,43 an
administrative case involving a court utility worker likewise
charged with disgraceful and immoral conduct, applying the
doctrines laid down in Estrada, the Court held that:
For a particular conduct to constitute "disgraceful and immoral"
behavior under civil service laws, it must be regulated on account
of the concerns of public and secular morality. It cannot be judged
based on personal bias, specifically those colored by particular
mores. Nor should it be grounded on "cultural" values not
convincingly demonstrated to have been recognized in the realm
of public policy expressed in the Constitution and the laws. At the
same time, the constitutionally guaranteed rights (such as the
right to privacy) should be observed to the extent that they protect
behavior that may be frowned upon by the majority.
Under these tests, two things may be concluded from the fact that
an unmarried woman gives birth out of wedlock:
(1) if the father of the child is himself unmarried, the
woman is not ordinarily administratively liable for
disgraceful and immoral conduct.It may be a not-so-ideal
situation and may cause complications for both mother
and child but it does not give cause for administrative
sanction. There is no law which penalizes an unmarried
mother under those circumstances by reason of her
sexual conduct or proscribes the consensual sexual
activity between two unmarried persons. Neither does the
situation contravene any fundamental state policy as
expressed in the Constitution, a document that
accommodates various belief systems irrespective of
dogmatic origins.
(2) if the father of the child born out of wedlock is himself
married to a woman other thanthe mother, then there is a
cause for administrative sanction against either the father
or the mother. In sucha case, the "disgraceful and
immoral conduct" consists of having extramarital relations
with a married person. The sanctity of marriage is
constitutionally recognized and likewise affirmed by our
statutes as a special contract of permanent union.
Accordingly, judicial employees have been sanctioned for
their dalliances with married persons or for their own
betrayals of the marital vow of fidelity.
In this case, it was not disputed that, like respondent, the father of
her child was unmarried. Therefore, respondent cannot be held
liable for disgraceful and immoral conduct simply because she
gave birth to the child Christian Jeon out of wedlock.44 (Citations
omitted and emphases ours)
Both Estrada and Radamare administrative cases against
employees in the civil service. The Court, however, sees no
reason not to apply the doctrines enunciated in Estrada and
Radamin the instant case. Estrada and Radamalso required the
Court to delineate what conducts are considered disgraceful
and/or immoral as would constitute a ground for dismissal. More
importantly, as in the said administrative cases, the instant case
involves an employee’s security of tenure; this case likewise
concerns employment, which is not merely a specie of property
right, but also the means by which the employee and those who
depend on him live.45
It bears stressing that the right of an employee to security of
tenure is protected by the Constitution. Perfunctorily, a regular
employee may not be dismissed unless for cause provided under
the Labor Code and other relevant laws, in this case, the 1992
MRPS. As stated above, when the law refers to morality, it
necessarily pertains to public and secular morality and not
religious morality. Thus, the proscription against "disgraceful or
immoral conduct" under Section 94(e) of the 1992 MRPS, which
is made as a cause for dismissal, must necessarily refer to public
and secular morality. Accordingly, in order for a conduct tobe
considered as disgraceful or immoral, it must be "‘detrimental (or
dangerous) to those conditions upon which depend the existence
and progress of human society’ and not because the conduct is
proscribed by the beliefs of one religion or the other."
Thus, in Santos v. NLRC,46 the Court upheld the dismissal of a
teacher who had an extra-marital affair with his co-teacher, who is
likewise married, on the ground of disgraceful and immoral
conduct under Section 94(e) of the 1992 MRPS. The Court
pointed out that extra-marital affair is considered as a disgraceful
and immoral conduct is an afront to the sanctity of marriage,
which is a basic institution of society, viz:
We cannot overemphasize that having an extra-marital affair is an
afront to the sanctity of marriage, which is a basic institution of
society. Even our Family Code provides that husband and wife
must live together, observe mutual love, respect and fidelity. This
is rooted in the fact that both our Constitution and our laws
cherish the validity of marriage and unity of the family. Our laws,
in implementing this constitutional edict on marriage and the
family underscore their permanence, inviolability and solidarity.47
The petitioner’s pregnancy out of
wedlock is not a disgraceful or
immoral conduct since she and the
father of her child have no
impediment to marry each other.
In stark contrast to Santos, the Court does not find any
circumstance in this case which would lead the Court to conclude
that the petitioner committed a disgraceful or immoral conduct. It
bears stressing that the petitioner and her boyfriend, at the time
they conceived a child, had no legal impediment to marry. Indeed,
even prior to her dismissal, the petitioner married her boyfriend,
the father of her child. As the Court held in Radam, there is no
law which penalizes an unmarried mother by reason of her sexual
conduct or proscribes the consensual sexual activity between two
unmarried persons; that neither does such situation contravene
any fundamental state policy enshrined in the Constitution.
Admittedly, the petitioner is employed in an educational institution
where the teachings and doctrines of the Catholic Church,
including that on pre-marital sexual relations, is strictly upheld
and taught to the students. That her indiscretion, which resulted
in her pregnancy out of wedlock, is anathema to the doctrines of
the Catholic Church. However, viewed against the prevailing
norms of conduct, the petitioner’s conduct cannot be considered
as disgraceful or immoral; such conduct is not denounced by
public and secular morality. It may be an unusual arrangement,
but it certainly is not disgraceful or immoral within the
contemplation of the law.
To stress, pre-marital sexual relations between two consenting
adults who have no impediment to marry each other, and,
consequently, conceiving a child out of wedlock, gauged from a
purely public and secular view of morality, does not amount to a
disgraceful or immoral conduct under Section 94(e) of the 1992
MRPS.
Accordingly, the labor tribunals erred in upholding the validity of
the petitioner’s dismissal. The labor tribunals arbitrarily relied
solely on the circumstances surrounding the petitioner’s
pregnancy and its supposed effect on SSCW and its students
without evaluating whether the petitioner’s conduct is indeed
considered disgraceful or immoral in view of the prevailing norms
of conduct. In this regard, the labor tribunals’ respective
haphazard evaluation of the evidence amounts to grave abuse of
discretion, which the Court will rectify.
The labor tribunals’ finding that the petitioner’s pregnancy out of
wedlock despite the absence of substantial evidence is not only
arbitrary, but a grave abuse of discretion, which should have
been set right by the CA.
There is no substantial evidence to
prove that the petitioner’s pregnancy
out of wedlock caused grave scandal
to SSCW and its students.
SSCW claimed that the petitioner was primarily dismissed
because her pregnancy out of wedlock caused grave scandal to
SSCW and its students. That the scandal brought about by the
petitioner’s indiscretion prompted them to dismiss her. The LA
upheld the respondents’ claim, stating that:
In this particular case, an "objective" and "rational evaluation" of
the facts and circumstances obtaining in this case would lead us
to focus our attention x x x on the impact of the act committed by
the complainant. The act of the complainant x x x eroded the
moral principles being taught and project[ed] by the respondent
[C]atholic school to their young lady students.48 (Emphasis in the
original)
On the other hand, the NLRC opined that:
In the instant case, when the complainant-appellant was already
conceiving a child even before she got married, such is
considered a shameful and scandalous behavior, inimical to
public welfare and policy. It eroded the moral doctrines which the
respondent Catholic school, an exclusive school for girls, is
teaching the young girls. Thus, when the respondent-appellee
school terminated complainant-appellant’s services, it was a valid
exercise of its management prerogative. Whether or not she was
a teacher is of no moment. There is no separate set of rules for
non-teaching personnel. Respondents-appellees uphold the
teachings of the Catholic Church on pre-marital sex and that the
complainant-appellant as an employee of the school was
expected to abide by this basic principle and to live up with the
standards of their purely Catholic values. Her subsequent
marriage did not take away the fact that she had engaged in pre-
marital sex which the respondent-appellee school denounces as
the same is opposed to the teachings and doctrines it
espouses.49 (Emphasis ours)
Contrary to the labor tribunals’ declarations, the Court finds that
SSCW failed to adduce substantial evidence to prove that the
petitioner’s indiscretion indeed caused grave scandal to SSCW
and its students. Other than the SSCW’s bare allegation, the
records are bereft of any evidence that would convincingly prove
that the petitioner’s conduct indeed adversely affected SSCW’s
integrity in teaching the moral doctrines, which it stands for. The
petitioner is only a non-teaching personnel; her interaction with
SSCW’s students is very limited. Itis thus quite impossible that
her pregnancy out of wedlock caused such a grave scandal, as
claimed by SSCW, as to warranther dismissal.
Settled is the rule that in termination cases, the burden of proving
that the dismissal of the employees was for a valid and
authorized cause rests on the employer. It is incumbent upon the
employer to show by substantial evidence that the termination of
the employment of the employees was validly made and failure to
discharge that duty would mean that the dismissal is not justified
and therefore illegal.50 "Substantial evidence is more than a mere
scintilla of evidence. It means such relevant evidence as a
reasonable mind might accept as adequateto support a
conclusion, even if other minds equally reasonable
mightconceivably opine otherwise."51
Indubitably, bare allegations do not amount to substantial
evidence. Considering that the respondents failed to adduce
substantial evidence to prove their asserted cause for the
petitioner’s dismissal, the labor tribunals should not have upheld
their allegations hook, line and sinker. The labor tribunals’
respective findings, which were arrived at sans any substantial
evidence, amounts to a grave abuse of discretion, which the CA
should have rectified. "Security of tenure is a right which may not
be denied on mere speculation of any unclearand nebulous
basis."52
The petitioner’s dismissal is not a
valid exercise of SSCW’s
management prerogative.
The CA be labored the management prerogative of SSCW to
discipline its employees. The CA opined that the petitioner’s
dismissal is a valid exercise of management prerogative to
impose penalties on erring employees pursuant to its policies,
rules and regulations.
The Court does not agree.
The Court has held that "management is free to regulate,
according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working
methods, time, place and manner of work, processes to be
followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and discipline,
dismissal and recall of workers. The exercise of management
prerogative, however, is not absolute as it must beexercised in
good faith and with due regard to the rights of labor."
Management cannot exercise its prerogative in a cruel,
repressive, or despotic manner.53
SSCW, as employer, undeniably has the right to discipline its
employees and, if need be, dismiss themif there is a valid cause
to do so. However, as already explained, there is no cause to
dismiss the petitioner. Her conduct is not considered by law as
disgraceful or immoral. Further, the respondents themselves have
admitted that SSCW, at the time of the controversy, does not
have any policy or rule against an employee who engages in pre-
marital sexual relations and conceives a child as a result thereof.
There being no valid basis in law or even in SSCW’s policy and
rules, SSCW’s dismissal of the petitioner is despotic and arbitrary
and, thus, not a valid exercise of management prerogative.
In sum, the Court finds that the petitioner was illegally dismissed
as there was no just cause for the termination of her employment.
SSCW failed to adduce substantial evidence to establish that the
petitioner’s conduct, i.e., engaging in pre-marital sexual relations
and conceiving a child out of wedlock, assessed in light of the
prevailing norms of conduct, is considered disgraceful or immoral.
The labor tribunals gravely abused their discretion in upholding
the validity of the petitioner’s dismissal as the charge against the
petitioner lay not on substantial evidence, but on the bare
allegations of SSCW. In turn, the CA committed reversible error in
upholding the validity of the petitioner’s dismissal, failing
torecognize that the labor tribunals gravely abused their
discretion in ruling for the respondents.
The petitioner is entitled to
separation pay, in lieu of actual
reinstatement, full backwages and
attorney’s fees, but not to moral and
exemplary damages.
Having established that the petitioner was illegally dismissed, the
Court now determines the reliefs thatshe is entitled to and their
extent. Under the law and prevailing jurisprudence, "an illegally
dismissed employee is entitled to reinstatement as a matter of
right."54 Aside from the instances provided under Articles
28355 and 28456 of the Labor Code, separation pay is, however,
granted when reinstatement is no longer feasible because of
strained relations between the employer and the employee. In
cases of illegal dismissal, the accepted doctrine is that separation
pay is available in lieu of reinstatement when the latter recourse
is no longer practical or in the best interest of the parties.57
In Divine Word High School v. NLRC,58 the Court ordered the
employer Catholic school to pay the illegally dismissed high
school teacher separation pay in lieu of actual reinstatement
since her continued presence as a teacher in the school "may
well bemet with antipathy and antagonism by some sectors in the
school community."59
In view of the particular circumstances of this case, it would be
more prudent to direct SSCW to pay the petitioner separation pay
inlieu of actual reinstatement. The continued employment of the
petitioner with SSCW would only serve to intensify the
atmosphere of antipathy and antagonism between the parties.
Consequently, the Court awards separation pay to the petitioner
equivalent to one (1) month pay for every year of service, with a
fraction of at least six (6) months considered as one (1) whole
year, from the time of her illegal dismissal up to the finality of this
judgment, as an alternative to reinstatement.
Also, "employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits or their
monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their
actual reinstatement but if reinstatement is no longer possible, the
backwages shall be computed from the time of their illegal
termination up to the finality of the decision."60 Accordingly, the
petitioner is entitled to an award of full backwages from the time
she was illegally dismissed up to the finality of this decision.
Nevertheless, the petitioner is not entitled to moral and exemplary
damages. "A dismissed employee isentitled to moral damages
when the dismissal is attended by bad faith or fraud or constitutes
an act oppressive to labor, or is done in a manner contrary to
good morals, good customs or public policy. Exemplary damages
may be awarded if the dismissal is effected in a wanton,
oppressive or malevolent manner."61
"Bad faith, under the law, does not simply connote bad judgment
or negligence. It imports a dishonest purpose or some moral
1âw phi 1
obliquity and conscious doing of a wrong, or a breach of a known
duty through some motive or interest or ill will that partakes of the
nature of fraud."62
"It must be noted that the burden of proving bad faith rests on the
one alleging it"63 since basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the
same.64 "Allegations of bad faith and fraud must be proved by
clear and convincing evidence."65
The records of this case are bereft of any clear and convincing
evidence showing that the respondents acted in bad faith or in a
wanton or fraudulent manner in dismissing the petitioner. That the
petitioner was illegally dismissed is insufficient to prove bad faith.
A dismissal may be contrary to law but by itself alone, it does not
establish bad faith to entitle the dismissed employee to moral
damages. The award of moral and exemplary damages cannot
be justified solely upon the premise that the employer dismissed
his employee without cause.66
However, the petitioner is entitled to attorney’s fees in the amount
of 10% of the total monetary award pursuant to Article 11167 of the
Labor Code. "It is settled that where an employee was forced to
litigate and, thus, incur expenses to protect his rights and interest,
the award of attorney’s fees is legally and morally justifiable."68

Finally, legal interest shall be imposed on the monetary awards

herein granted at the rate of six percent (6%) per annumfrom the
finality of this judgment until fully paid.69

WHEREFORE, in consideration of the foregoing disquisitions, the

petition is GRANTED. The Decision dated September 24, 2008
and Resolution dated March 2, 2009 of the Court of Appeals in
CA-G.R. SP No. 100188 are hereby REVERSED and SET
ASIDE.

The respondent, St. Scholastica’s College Westgrove, is hereby

declared guilty of illegal dismissal and is hereby ORDERED to
pay the petitioner, Cheryll Santos Leus, the following: (a)
separation pay in lieu of actual reinstatement equivalent to one
(1) month pay for every year of service, with a fraction of at least
six (6) months considered as one (1) whole year from the time of
her dismissal up to the finality of this Decision; (b) full backwages
from the time of her illegal dismissal up to the finality of this
Decision; and (c) attorney’s fees equivalent to ten percent (10%)
of the total monetary award. The monetary awards herein granted
shall earn legal interest at the rate of six percent (6%) per
annumfrom the date of the finality of this Decision untilfully paid.
The case is REMANDED to the Labor Arbiter for the computation
of petitioner’s monetary awards.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 173489 February 25, 2013
ALILEM CREDIT COOPERATIVE, INC., now known as
ALILEM MULTIPURPOSE COOPERATIVE, INC.,Petitioner,
vs.
SALVADOR M. BANDIOLA, JR., Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court filed by petitioner Alilem Credit Cooperative, Inc.
against respondent Salvador M. Bandiola, Jr. assailing the Court
of Appeals (CA) Decision1 dated January 16, 2006 and
Resolution2 dated July 5, 2006 in CAG. R. SP No. 64554.
The case stemmed from the following facts:
Respondent was employed by petitioner as bookkeeper.
Petitioner's Board of Directors (the Board) received a letter from a
certain Napoleon Gao-ay (Napoleon) reporting the alleged
immoral coaduct and unbecoming behavior of respondent by
having an illicit relationship with Napoleon’s sister, Thelma G.
Palma (Thelma). This prompted the Board to conduct a
preliminary investigation.3
During the preliminary investigation, the Board received the
following evidence of respondent’s alleged extramarital affair:
1. Melanie Gao-ay’s (Melanie) sworn statement declaring
that sometime in December 1996, respondent slept on
the same bed with Thelma in a boarding house in San
Fernando, La Union where she (Melanie) and Thelma
resided. She personally witnessed the intimacy of
respondent and Thelma when they engaged in
lovemaking as they slept in one room and openly
displayed their affection for each other.4
2. Rosita Tegon’s (Rosita) sworn statement that on May
23, 1997, she saw Thelma talk to respondent in
petitioner’s office asking him to accompany her in San
Fernando, La Union.5
3. Emma Gao-ay Lubrin’s (Emma, Thelma’s sister)
interview wherein she admitted that she and her family
confronted Thelma about the alleged extramarital affair
which Thelma allegedly admitted.6
4. Napoleon’s interview with the Board wherein he
claimed that their family tried to convince Thelma to end
her extramarital affair with respondent but instead of
complying, she in fact lived together with respondent.7
The Board decided to form an Ad Hoc Committee to investigate
the charges against respondent yielding the following additional
evidence:
1. Agustina Boteras’ (Agustina) sworn statement that she
witnessed a confrontation between Thelma and her sister
in the latter’s residence concerning the alleged
extramarital affair. At that time, respondent’s wife was
allegedly present who in fact pleaded Thelma to end her
relationship with respondent but she supposedly said "No
way!"8
 2. Milagros Villacorte’s sworn statement that while she
was at the Bethany Hospital in San Fernando, La Union
where her husband was confined, respondent
approached her and asked her to look for Thelma who
was then having her class. When he finally found her,
respondent and Thelma met and talked in the hospital
premises.9
3. Julienne Marie L. Dalangey’s certification that on
August 9 to 10, 1996, respondent attended a seminar on
Internal Control and Systems Design I at the Northern
Luzon Federation of Cooperatives and Development
Center (NORLU) Pension House in Baguio City, together
with a lady companion whom he introduced as his wife.
Apparently, the lady was not his wife because at that
time, his wife reported for work in the Municipal Hall of
Alilem.10
Respondent, on the other hand, denied the accusation against
him. He, instead, claimed that the accusation was a result of the
insecurity felt by some members of the cooperative and of the
Board because of his growing popularity owing to his exemplary
record as an employee.11 Thelma executed an affidavit likewise
denying the allegations of extra-marital affair.12
Meanwhile, on June 7, 1997, the Board received a petition from
about fifty members of the cooperative asking the relief of
respondent due to his illicit affair with Thelma.13
In its Summary Investigation Report, the Ad Hoc Committee
concluded that respondent was involved in an extra-marital affair
with Thelma. On July 10, 1997, the Chairman of the Board sent a
letter14 to respondent informing him of the existence of a prima
facie case against him for "illicit marital affair, an act that brings
discredit to the cooperative organization and a cause for
termination per AMPC (Alilem Multi-Purpose Cooperative)
Personnel Policy. Respondent was directed to appear and be
present at the AMPC office for a hearing. He was likewise
advised of his right to be assisted by counsel.
On the day of the hearing, respondent requested15 for
postponement on the ground that his lawyer was not available.
The request was, however, denied and the hearing proceeded as
scheduled.
In a Memorandum16 dated July 16, 1997, respondent was
informed of Board Resolution No. 05, series of 199717embodying
the Board’s decision to terminate his services as bookkeeper of
petitioner, effective July 31, 1997, without any compensation or
benefit except the unpaid balance of his regular salary for
services actually rendered.18
Aggrieved, respondent filed a Complaint for Illegal Dismissal
against petitioner before the Regional Arbitration Branch of the
National Labor Relations Commission (NLRC).19
On April 30, 1998, the Labor Arbiter (LA)
dismissed20 respondent’s complaint for lack of merit. The LA
concluded that respondent had been or might still be carrying on
an affair with a married woman. The LA found it unforgiving in the
case of a married employee who sleeps with or has illicit relations
with another married person for in such case, the employee
sullies not only the reputation of his spouse and his family but the
reputation as well of the spouse of his paramour and the latter’s
family.21 As opposed to respondent’s claim that the accusation is
a mere fabrication of some of the directors or cooperative
members who were allegedly envious of his growing popularity,
the LA gave more credence to the testimonies of petitioner’s
witnesses who were relatives of Thelma and who had no motive
to falsely testify because their family reputation was likewise at a
risk of being tarnished.22 The LA, thus, found respondent to have
been validly dismissed from employment for violation of the
cooperative’s Personnel Policy, specifically "the commission of
acts that bring discredit to the cooperative organization,
especially, but not limited to conviction of any crime, illicit marital
affairs, scandalous acts inimical to established and accepted
social mores." The LA also found no violation of respondent’s
right to due process as he was given ample opportunity to defend
himself from the accusation against him.23
On appeal, the NLRC set aside24 the LA decision and rendered a
judgment disposed in this wise:
WHEREFORE, the appealed Decision of the Executive Labor
Arbiter is SET ASIDE. Judgment is hereby rendered:
1. declaring respondent Alilem Credit Cooperative, Inc.
(ACCI) also known as Alilem Multi-Purpose Cooperative
(AMPC) guilty of illegal dismissal for the reasons above-
discussed;
2. directing the said respondent to pay complainant
Salvador Bandiola, Jr. full backwages computed from the
time of (sic) his wages were withheld until finality of this
judgment;
3. directing, on account of strained relationship between
the parties, the above-named respondent to pay
complainant, in lieu of reinstatement, separation pay
computed at one (1) month pay for every year of service,
a fraction of six (6) months to be computed as one (1)
whole year; [and]
4. directing respondent to pay complainant ten (10%)
percent attorney’s fees based on the total monetary
award.
SO ORDERED.25
The NLRC found petitioner’s Personnel Policy to be of
questionable existence and validity because it was
unnumbered.26 It held that even assuming that respondent had an
extra-marital affair with a married woman, the latter is not his
fellow worker in petitioner’s business establishment.27 It, thus,
concluded that respondent’s dismissal was not founded on any of
the just causes for termination of employment under Article 282 of
the Labor Code, as amended.28 It, likewise, declared that
respondent was not afforded his right to his counsel of choice as
his request for postponement was not allowed.29 Therefore, the
NLRC declared respondent’s dismissal from employment illegal,
entitling him to the payment of backwages, separation pay, and
attorney’s fees.30
Petitioner elevated the matter to the CA, but it failed to obtain a
favorable decision. The CA found respondent’s dismissal being
founded on the serious misconduct he allegedly committed by
carrying an illicit relationship with a married woman.31 While
considering said act a serious misconduct, it refused to consider it
sufficient to justify respondent’s dismissal, because it was not
done in the performance of his duties as would make him unfit to
continue working for petitioner.32 Petitioner’s motion for
reconsideration was likewise denied in the assailed July 5, 2006
resolution.
Unsatisfied, petitioner now comes before the Court in this petition
for review on certiorari insisting on the validity of respondent’s
dismissal from employment.
We find merit in the petition.
It is undisputed that respondent was dismissed from employment
for engaging in extramarital affairs, a ground for termination of
employment stated in petitioner’s Personnel Policy. This basis of
termination was made known to respondent as early as the first
communication made by petitioner. In its June 20, 1997 letter,
petitioner directed respondent to explain in writing or personal
confrontation why he should not be terminated for violation of
Section 4.1.4 of the Personnel Policy.33 Respondent merely
denied the accusation against him34 and did not question the
basis of such termination. When the LA was called upon to
decide the illegal dismissal case, it ruled in favor of petitioner and
upheld the basis of such dismissal which is the cited Personnel
Policy. The NLRC, however, refused to recognize the existence
1âw phi 1
and validity of petitioner’s Personnel Policy on which the ground
for termination was embodied.35
The existence of the Personnel Policy containing provisions on
the grounds for termination of employees was not questioned by
respondent. In his position paper, respondent only assailed the
effectivity of the policy, as for him as it was amended on the same
date as the letter-complaints against him. In other words, he
claimed that the policy was amended in order to include therein
the ground for his termination to make sure that he is removed
from his position.36
We do not subscribe to such an argument.
A comparison of petitioner’s old and new Personnel Policies
attached by respondent himself to his Position Paper shows that
under the old policy, one of the grounds for termination of an
employee is "commission of acts or commission (sic) of
duties that bring discredit to the organization,37" while under
the new policy, one of the grounds is the "commission of acts
that brings (sic) discredit to the cooperative organization,
especially, but not limited to, conviction of any crime, illicit
marital affairs, scandalous acts inimical to established and
accepted social mores."38 Contrary to respondent’s claim, with
the amendment of the Personnel Policy, petitioner did not create
a new ground for the termination of employment to make sure
that respondent is removed from his position. The quoted ground
under the old policy is similar to that provided for in the new
policy. The enumeration containing the specific act of "illicit
marital affairs" is not an additional ground, but an example of an
act that brings discredit to the cooperative. It is merely an
interpretation of what petitioner considers as such. It is, thus,
clear from the foregoing that engaging in extra-marital affairs is a
ground for termination of employment not only under the new but
even under the old Personnel Policy of petitioner. The effectivity
of the policy as to respondent cannot, therefore, be questioned.
To be sure, an employer is free to regulate all aspects of
employment.39 It may make reasonable rules and regulations for
the government of its employees which become part of the
contract of employment provided they are made known to the
employee.40 In the event of a violation, an employee may be
validly terminated from employment on the ground that an
employer cannot rationally be expected to retain the employment
of a person whose lack of morals, respect and loyalty to his
employer, regard for his employer’s rules and application of the
dignity and responsibility, has so plainly and completely been
bared.41
Applying now the above-discussed ground for termination, we
now determine whether respondent was properly dismissed from
employment. In other words, did petitioner adequately prove that
respondent indeed engaged in extra-marital affairs, an act which
petitioner considers as would bring discredit to the cooperative?
We answer in the affirmative.
The employer’s evidence consists of sworn statements of either
relatives or friends of Thelma and respondent. They either had
direct personal knowledge of the illicit relationship or revealed
circumstances indicating the existence of such relationship. As
aptly observed by the LA:
x x x Moreover, the credibility of the persons who bore witness
against him can hardly be questioned because some of these
persons are relatives or friends of either [respondent] or his lover.
In particular, it is hard to see how Napoleon Gao-ay, the brother
of his lover, Thelma, could have resorted to a lie just to destroy
him when the same scandal could also result in tarnishing the
reputation of his own family. The motive of Napoleon in bringing
the matter to the attention of the Board of Directors, after all, was
based on ethical grounds – he wanted a stop to the affair
because it was a disgrace to the community.
There is also no reason to doubt the statement of Melanie Gao-
ay, the wife of Napoleon, who witnessed the embarrassing
"encounter", to borrow the term she used, between [respondent]
and Thelma in her own boarding house.42
While respondent’s act of engaging in extra--marital affairs may
be considered personal to him and does not directly affect the
performance of his assigned task as bookkeeper, aside from the
fact that the act was specifically provided for by petitioner’s
Personnel Policy as one of the grounds for termination of
employment, said act raised concerns to petitioner as the Board
received numerous complaints and petitions from the cooperative
members themselves asking for the removal of respondent
because of his immoral conduct.43
The next question is whether procedural due process was
observed in the termination of respondent’s services. "Before the
services of an employee can be validly terminated, the employer
must furnish him two written notices: (a) a written notice served
on the employee specifying the ground or grounds for
termination, and giving the employee reasonable opportunity to
explain his side; and (b) a written notice of termination served on
the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination."44 The employer must inform the employee of the
charges against him and to hear his defenses. A full adversarial
proceeding is not necessary as the parties may be heard through
pleadings, written explanations, position papers, memorandum or
oral argument.45
In this case, respondent was adequately afforded the opportunity
to defend himself and explain the accusation against him. Upon
receipt of the complaint, petitioner conducted a preliminary
investigation and even created an Ad Hoc Committee to
investigate the matter. Respondent was directed to explain either
in writing or by a personal confrontation with the Board why he
should not be terminated for engaging in illicit affair.46 Not only did
petitioner give him the opportunity but respondent in fact informed
petitioner that he opted to present his side orally47 and did so as
promised when he specifically denied such allegations before the
AdHoc Committee.48 Moreover, respondent was also allowed to
peruse the investigation report prepared by the Ad Hoc
Committee and was advised that he was entitled to assistance of
counsel.49 Afterwhich, hearing was conducted. It was only after
thorough investigation and proper notice and hearing to
respondent that petitioner decided whether to dismiss the former
or not. The decision to terminate respondent from employment
was embodied in Board Resolution No. 05, series of 1997 a copy
of which was furnished respondent.50 With this resolution,
respondent was adequately notified of petitioner’s decision to
remove him from his position. Respondent cannot now claim that
his right to due process was infringed upon.
WHEREFORE, premises considered, the petition is
hereby GRANTED. The Court of Appeals Decision dated January
16, 2006 and Resolution dated July 5, 2006 in CA-G.R. SP No.
64554, are SET ASIDE. The Labor Arbiter's Decision dated April
30, 1998 in NLRC Case No. RAB-1-08-1144-97 (IS) dismissing
respondent Salvador M. Bandiola, Jr.'s complaint against
petitioner Alilem Credit Cooperative, Inc., Is REINSTATED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 49549 August 30, 1990
EVELYN CHUA-QUA, petitioner,
vs.
HON. JACOBO C. CLAVE, in his capacity as Presidential
Executive Assistant, and TAY TUNG HIGH SCHOOL,
INC., respondents.
William C. Gunitang and Jaime Opinion for petitioner.
Laogan Law Offices for private respondent.
REGALADO, J.:
This would have been just another illegal dismissal case were it not for the controversial and
unique situation that the marriage of herein petitioner, then a classroom teacher, to her
student who was fourteen (14) years her junior, was considered by the school authorities as
sufficient basis for terminating her services.
Private respondent Tay Tung High School, Inc. is an educational
institution in Bacolod City. Petitioner had been employed therein
as a teacher since 1963 and, in 1976 when this dispute arose,
was the class adviser in the sixth grade where one Bobby Qua
was enrolled. Since it was the policy of the school to extend
remedial instructions to its students, Bobby Qua was imparted
such instructions in school by petitioner. 1 In the course thereof,
the couple fell in love and on December 24, 1975, they got
married in a civil ceremony solemnized in Iloilo City by Hon.
Cornelio G. Lazaro, City Judge of Iloilo.2 Petitioner was then thirty
(30) years of age but Bobby Qua being sixteen (16) years old,
consent and advice to the marriage was given by his mother, Mrs.
Concepcion Ong.3 Their marriage was ratified in accordance with
the rites of their religion in a church wedding solemnized by Fr.
Nick Melicor at Bacolod City on January 10, 1976. 4
On February 4, 1976, private respondent filed with the sub-
regional office of the Department of Labor at Bacolod City an
application for clearance to terminate the employment of
petitioner on the following ground: "For abusive and unethical
conduct unbecoming of a dignified school teacher and that her
continued employment is inimical to the best interest, and would
downgrade the high moral values, of the school." 5
Petitioner was placed under suspension without pay on March 12,
1976. 6 Executive Labor Arbiter Jose Y. Aguirre, Jr. of the
National Labor Relations Commission, Bacolod City, to whom the
case was certified for resolution, required the parties to submit
their position papers and supporting evidence. Affidavits 7 were
submitted by private respondent to bolster its contention that
petitioner, "defying all standards of decency, recklessly took
advantage of her position as school teacher, lured a Grade VI boy
under her advisory section and 15 years her junior into an
amorous relation." 8 More specifically, private respondent raised
issues on the fact that petitioner stayed alone with Bobby Qua in
the classroom after school hours when everybody had gone
home, with one door allegedly locked and the other slightly open.
On September 17, 1976, Executive Labor Arbiter Jose Y. Aguirre,
Jr., without conducting any formal hearing, rendered an "Award"
in NLRC Case No. 956 in favor of private respondent granting the
clearance to terminate the employment of petitioner. It was held
therein that —
The affidavits . . . although self-serving but were
never disputed by the respondent pointed out that
before the marriage of respondent to Bobby Qua,
fourteen (14) years her junior and during her
employment with petitioner, an amorous
 relationship existed between them. In the absence
of evidence to the contrary, the undisputed written
testimonies of several witnesses convincingly
picture the circumstances under which such
amorous relationship was manifested within the
premises of the school, inside the classroom, and
within the sight of some employees. While no
direct evidences have been introduced to show
that immoral acts were committed during these
times, it is however enough for a sane and
credible mind to imagine and conclude what
transpired and took place during these times. . . . 9
Petitioner, however, denied having received any copy of the
affidavits referred to. 10
On October 7, 1976, petitioner appealed to the National Labor
Relations Commission claiming denial of due process for not
having been furnished copies of the aforesaid affidavits relied on
by the labor arbiter. She further contended that there was nothing
immoral, nor was it abusive and unethical conduct unbecoming of
a dignified school teacher, for a teacher to enter into lawful
wedlock with her student.11
On December 27, 1976, the National Labor Relations
Commission unanimously reversed the Labor Arbiter's decision
and ordered petitioner's reinstatement with backwages, with the
following specific findings:
Affiant Maselliones deposed and said that he saw
appellant and Qua sitting on the student desk
inside a classroom after classes. The depositions
of affiants Despi and Chin are of the same tenor.
No statements whatever were sworn by them that
they were eyewitnesses to immoral or scandalous
acts.
xxx xxx xxx
Even if we have to strain our sense of moral
values to accommodate the conclusion of the
Arbiter, we could not deduce anything immoral or
scandalous about a girl and a boy talking inside a
room after classes with lights on and with the door
open.
xxx xxx xxx
Petitioner-appellee naively insisted that the
clearance application was precipitated by immoral
acts which did not lend dignity to the position of
appellant. Aside from such gratuitous assertions
of immoral acts or conduct by herein appellant, no
evidence to support such claims was introduced
by petitioner-appellee. We reviewed the the
sequence of events from the beginning of the
relationship between appellant Evelyn Chua and
Bobby Qua up to the date of the filing of the
present application for clearance in search of
evidence that could have proved detrimental to
the image and dignity of the school but none has
come to our attention. . . . 12
The case was elevated by private respondent to the Minister of
Labor who, on March 30, 1977, reversed the decision of the
National Labor Relations Commission. The petitioner was,
however, awarded six (6) months salary as financial assistance. 13
On May 20, 1977, petitioner appealed the said decision to the
Office of the President of the Philippines. 14 After the
corresponding exchanges, on September 1, 1978 said office,
through Presidential Executive Assistant Jacobo C. Clave,
rendered its decision reversing the appealed decision. Private
respondent was ordered to reinstate petitioner to her former
position without loss of seniority rights and other privileges and
with full back wages from the time she was not allowed to work
until the date of her actual reinstatement. 15
Having run the gamut of three prior adjudications of the case with
alternating reversals, one would think that this decision of public
respondent wrote finis to petitioner's calvary. However, in a
resolution dated December 6, 1978, public respondent, acting on
a motion for reconsideration 16 of herein private respondent and
despite opposition thereto, 17 reconsidered and modified the
aforesaid decision, this time giving due course to the application
of Tay Tung High School, Inc. to terminate the services of
petitioner as classroom teacher but giving her separation pay
equivalent to her six (6) months salary. 18
In thus reconsidering his earlier decision, public respondent
reasoned out in his manifestation/comment filed on August 14,
1979 in this Court in the present case:
That this Office did not limit itself to the legal
issues involved in the case, but went further to
view the matter from the standpoint of policy
which involves the delicate task of rearing and
educating of children whose interest must be held
paramount in the school community, and on this
basis, this Office deemed it wise to uphold the
judgment and action of the school authorities in
terminating the services of a teacher whose
actuations and behavior, in the belief of the school
authorities, had spawned ugly rumors that had
cast serious doubts on her integrity, a situation
which was considered by them as not healthy for
a school campus, believing that a school teacher
should at all times act with utmost circumspection
and conduct herself beyond reproach and above
suspicion; 19
In this petition for certiorari, petitioner relies on the following
grounds for the reversal of the aforesaid resolution of public
respondent, viz.:
1. The dismissal or termination of petitioner's
employment, despite Tay Tung's claim to the
contrary, was actually based on her marriage with
her pupil and is, therefore, illegal.
2. Petitioner's right to due process under the
Constitution was violated when the hearsay
affidavits of Laddy Maselliones, Eleuterio Despi,
Pina D. Chiu, and Ong Lee Bing, were admitted
and considered in evidence without presenting the
affiants as witnesses and affording the petitioner
the right to confront and cross-examine them.
3. No sufficient proofs were adduced to show that
petitioner committed serious misconduct or
breached the trust reposed on her by her
employer or committed any of the other grounds
enumerated in Article 283 (Now Article 282) of the
Labor Code which will justify the termination of
her employment. 20
We first dispose of petitioner's claim that her right to due process
was violated. We do not agree. There is no denial of due process
where a party was afforded an opportunity to present his side.
Also, the procedure by which issues are resolved based on
position papers, affidavits and other documentary evidence is
recognized as not violative of such right. Moreover, petitioner
could have insisted on a hearing to confront and cross-examine
the affiants but she did not do so, obviously because she was
convinced that the case involves a question of law. Besides, said
affidavits were also cited and discussed by her in the proceedings
before the Ministry of Labor.
Now, on the merits. Citing its upright intention to preserve the
respect of the community toward the teachers and to strengthen
the educational system, private respondent submits that
petitioner's actuations as a teacher constitute serious misconduct,
if not an immoral act, a breach of trust and confidence reposed
upon her and, thus, a valid and just ground to terminate her
services. It argues that as a school teacher who exercises
substitute parental authority over her pupils inside the school
campus, petitioner had moral ascendancy over Bobby Qua and,
therefore, she must not abuse such authority and respect
extended to her. Furthermore, it charged petitioner with having
allegedly violated the Code of Ethics for teachers the pertinent
provision of which states that a "school official or teacher should
never take advantage of his/her position to court a pupil or
student." 21
On the other hand, petitioner maintains that there was no ground
to terminate her services as there is nothing wrong with a teacher
falling in love with her pupil and, subsequently, contracting a
lawful marriage with him. She argued that she was dismissed
because of her marriage with Bobby Qua This contention was
sustained in the aforesaid decision of the National Labor
Relations Commission thus:
. . . One thing, however, has not escaped our
observation: That the application for clearance
was filed only after more than one month elapsed
from the date of appellant's marriage to Bobby
Qua Certainly, such belated application for
clearance weakens instead of strengthening the
cause of petitioner-appellee. The alleged immoral
acts transpired before the marriage and if it is
these alleged undignified conduct that triggered
the intended separation, then why was the
present application for clearance not filed at that
time when the alleged demoralizing effect was still
fresh and abrasive?22
After a painstaking perusal of the records, we are of the
considered view that the determination of the legality of the
dismissal hinges on the issue of whether or not there is
substantial evidence to prove that the antecedent facts which
culminated in the marriage between petitioner and her student
constitute immorality and/or grave misconduct. To constitute
immorality, the circumstances of each particular case must be
holistically considered and evaluated in the light of prevailing
norms of conduct and the applicable law. Contrary to what
petitioner had insisted on from the very start, what is before us is
a factual question, the resolution of which is better left to the trier
of facts.
Considering that there was no formal hearing conducted, we are
constrained to review the factual conclusions arrived at by public
respondent, and to nullify his decision through the extraordinary
writ of certiorari if the same is tainted by absence or excess of
jurisdiction or grave abuse of discretion. The findings of fact must
be supported by substantial evidence; otherwise, this Court is not
bound thereby.23
We rule that public respondent acted with grave abuse of
discretion. As vividly and forcefully observed by him in his original
decision:
Indeed, the records relied upon by the Acting
Secretary of Labor (actually the records referred
to are the affidavits attached as Annexes "A" to
"D" of the position paper dated August 10, 1976
filed by appellee at the arbitration proceedings) in
arriving at his decision are unbelievable and
unworthy of credit, leaving many question
unanswered by a rational mind. For one thing, the
affidavits refer to certain times of the day during
off school hours when appellant and her student
were found together in one of the classrooms of
the school. But the records of the case present a
ready answer: appellant was giving remedial
 instruction to her student and the school was the
most convenient place to serve the purpose. What
is glaring in the affidavits is the complete absence
of specific immoral acts allegedly committed by
appellant and her student. For another, and very
important at that, the alleged acts complained of
invariably happened from September to
December, 1975, but the disciplinenary action
imposed by appellee was sought only in February,
1976, and what is more, the affidavits were
executed only in August, 1976 and from all
indications, were prepared by appellee or its
counsel. The affidavits heavily relied upon by
appellee are clearly the product of after-thought. .
. . The action pursued by appellee in dismissing
appellant over one month after her marriage,
allegedly based on immoral acts committed even
much earlier, is open to basis of the action sought
seriously doubted; on the question. The basis of
the action sought is seriously doubted; on the
contrary, we are more inclined to believe that
appellee had certain selfish, ulterior and
undisclosed motives known only to itself. 24
As earlier stated, from the outset even the labor arbiter conceded
that there was no direct evidence to show that immoral acts were
committed. Nonetheless, indulging in a patently unfair conjecture,
he concluded that "it is however enough for a sane and credible
mind to imagine and conclude what transpired during those
times." 25 In reversing his decision, the National Labor Relations
Commission observed that the assertions of immoral acts or
conducts are gratuitous and that there is no direct evidence to
support such claim, 26 a finding which herein public respondent
himself shared.
We are, therefore, at a loss as to how public respondent could
adopt the volte-face in the questioned resolution, which we hereby reject, despite
his prior trenchant observations hereinbefore quoted. What is revealing however, is that the
reversal of his original decision is inexplicably based on unsubstantiated surmises and non
sequiturs which he incorporated in his assailed resolution in this wise:
. . . While admittedly, no one directly saw Evelyn
Chua and Bobby Qua doing immoral acts inside
the classroom it seems obvious and this Office is
convinced that such a happening indeed
transpired within the solitude of the classrom after
regular class hours. The marriage between
Evelyn Chua and Bobby Qua is the best proof
which confirms the suspicion that the two indulged
in amorous relations in that place during those
times of the day. . . . 27
With the finding that there is no substantial evidence of the
imputed immoral acts, it follows that the alleged violation of the
Code of Ethics governing school teachers would have no basis.
Private respondent utterly failed to show that petitioner took
advantage of her position to court her student. If the two
eventually fell in love, despite the disparity in their ages and
academic levels, this only lends substance to the truism that the
heart has reasons of its own which reason does not know. But,
definitely, yielding to this gentle and universal emotion is not to be
so casually equated with immorality. The deviation of the
circumstances of their marriage from the usual societal pattern
cannot be considered as a defiance of contemporary social
mores.
It would seem quite obvious that the avowed policy of the school
in rearing and educating children is being unnecessarily bannered
to justify the dismissal of petitioner. This policy, however, is not at
odds with and should not be capitalized on to defeat the security
of tenure granted by the Constitution to labor. In termination
cases, the burden of proving just and valid cause for dismissing
an employee rests on the employer and his failure to do so would
result in a finding that the dismissal is unjustified.
The charge against petitioner not having been substantiated, we
declare her dismissal as unwarranted and illegal. It being
apparent, however, that the relationship between petitioner and
private respondent has been inevitably and severely strained, we
believe that it would neither be to the interest of the parties nor
would any prudent purpose be served by ordering her
reinstatement.

WHEREFORE, the petition for certiorari is GRANTED and the

resolution of public respondent, dated December 6, 1978 is
ANNULLED and SET ASIDE. Private respondent Tay Tung High
School, Inc. is hereby ORDERED to pay petitioner backwages
equivalent to three (3) years, without any deduction or
qualification, and separation pay in the amount of one (1) month
for every year of service.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 106341 September 2, 1994
DELFIN G. VILLARAMA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND GOLDEN
DONUTS, INC., respondents.
Rogelio R. Udarbe for petitioner.
Armando V. Ampil for private respondent.
PUNO, J.:
Sexual harassment abounds in all sick societies. It is
reprehensible enough but more so when inflicted by those with
moral ascendancy over their victims. We rule that it is a valid
cause for separation from service.
First, the facts. On November 16, 1987, petitioner DELFIN
VILLARAMA was employed by private respondent GOLDEN
DONUTS, INC., as its Materials Manager. His starting salary was
P6,500.00 per month, later increased to P8,500.00.
On July 15, 1989, petitioner Villarama was charged with sexual
harassment by Divina Gonzaga, a clerk-typist assigned in his
department. The humiliating experience compelled her to resign
from work. Her letter-resignation, dated July 15, 1989, reads:
MR. LEOPOLDO H. PRIETO
President
Golden Donuts, Inc.
Dear Sir:
I would like to tender my resignation from my post as Clerk Typist
of Materials Department effective immediately.
It is really my regret to leave this company which has given me all
the opportunity I long desired. My five (5) months stay in the
company have been very gratifying professionally and financially
and I would not entertain the idea of resigning except for the most
shocking experience I have had in my whole life.
Last Friday, July 7, 1989, Mr. Delfin Villarama and Mr. Jess de
Jesus invited all the girls of Materials Department for a dinner
when in (sic) the last minute the other three (3) girls decided not
to join the groupp anymore. I do (sic) not have second thought(s)
in accepting their invitation for they are my colle(a)gues and I had
nothing in mind that would in any manner prompt me to refuse to
what appeared to me as a simple and cordial invitation. We went
to a restaurant along Makati Avenue where we ate our dinner. Mr.
Villarama, Mr. Olaybar and Mr. Jess de Jesus were drinking while
we were eating and (they) even offered me a few drinks and
when we were finished, they decided to bring me home. While on
my way, I found out that Mr. Villarama was not driving the way to
my house. I was wondering why we were taking the wrong way
until I found out that we were entering a motel. I was really
shock(ed). I did not expect that a somewhat reputable person like
Mr. Villarama could do such a thing to any of his subordinates. I
should have left the company without any word but I feel that I
would be unfair to those who might be similarly situated. I hope
that you would find time to investigate the veracity of my
allegations and make each (sic) responsible for is own deed.
(emphasis ours)
Thank you very much and more power.
Very respectfully yours,
DIVINA GONZAGA
The letter prompted Mr. Leopoldo Prieto, President of Golden
Donuts, Inc., to call petitioner to a meeting on August 4, 1989.
Petitioner was then required to explain the letter against him. It
appears that petitioner agreed to tender his resignation. Private
respondent moved swiftly to separate petitioner. Thus, private
respondent approved petitioner's application for leave of absence
with pay from August 5-28, 1989. It also issued an inter-office
memorandum, dated August 4, 1989, advising "all concerned"
that petitioner was no longer connected with the company
effective August 5, 1989. 1 Two (2) days later, or on August 7,
1989, Mr. Prieto sent a letter to petitioner confirming their
agreement that petitioner would be officially separated from the
private respondent. The letter reads:
Dear Mr. Villarama:
This is to officially confirm our discussion last Friday, August 4,
1989, regarding your employment with us. As per our agreement,
you will be officially separated from the company effective August
23, 1989.
May I, therefore, request you to please submit or send us your
resignation letter on or before the close of business hours of
August 22, 1989.
Please see the Personnel & Industrial Relations Office for your
clearance.
Very truly yours,
(SGD). LEOPOLDO H. PRIETO, JR.
President
In the interim, petitioner had a change of mind. In a letter dated
August 16, 1989, petitioner sought reconsideration of the
management's decision to terminate him, viz.:
DEAR SIR:
MAY I REQUEST FOR A RECONSIDERATION ON THE
DECISION HANDED DURING OUR MEETING OF AUGUST 4,
1989, TERMINATING MY SERVICES WITH THE COMPANY
EFFECTIVE AUGUST 5, 1989.
THE SIGNIFICANT CONTRIBUTION OF THE MATERIALS
DEPARTMENT, WHICH I HAD BEEN HEADING FOR THE
PAST 21 MONTHS, TO THE PERFORMANCE OF THE
COMPANY FAR OUTWEIGHS THE ERROR THAT I HAD
COMMITTED. AN ERROR THAT MUST NOT BE A BASIS FOR
SUCH A DRASTIC DECISION.
AS I AM STILL OFFICIALLY ON LEAVE UNTIL THE 29th, OF
THIS MONTH, MAY I EXPECT THAT I WILL RESUME MY
REGULAR DUTY ON THE 29th?
ANTICIPATING YOUR FAVORABLE REPLY.
VERY TRULY YOURS,
(SGD.) DELFIN G. VILLARAMA
For his failure to tender his resignation, petitioner was dismissed
by private respondent on August 23, 1989. Feeling aggrieved,
petitioner filed an illegal dismissal case 2 against private
respondent.
In a decision dated January 23, 1991, Labor Arbiter Salimar V.
Nambi held that due process was not observed in the dismissal of
petitioner and there was no valid cause for dismissal. Private
respondent GOLDEN DONUTS, INC. was ordered to: (1)
reinstate petitiner DELFIN G. VILLARAMA to his former position,
without loss of seniority rights, and pay his backwages at the rate
of P8,500.00 per month from August 1989, until actual
reinstatement; (2) pay petitioner the amount of P24,866.66,
representing his unused vacation leave and proportionate 13th
month pay; (3) pay petitioner P100,000.00, as moral damages,
and P20,000.00, as exemplary damages; and (3) pay the
attorney's fees equivalent to ten percent of the entire monetary
award.
Private respondent appealed to the National Labor Relations
Commission. On July 16, 1992, public respondent reversed the
decision of the labor arbiter. The dispositive portion of its
Resolution reads:
WHEREFORE, premises considered, the decision appealed from
is hereby set aside and a new one entered declaring the cause of
dismissal of complainant as valid; however, for the procedural
lapses, respondent (Golden Donuts, Inc.) is hereby ordered to
indemnify complainant (petitioner) in the form of separation pay
equivalent to two month's (sic) pay (for his two years of service,
as appears (sic) in the records), or the amount of P17,000.00.
SO ORDERED.
Hence, this petition where the following arguments are raised:
THE ALLEGED IMMORALITY CHARGED AGAINST
PETITIONER IS NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE ON RECORD.
THE MERE ADMISSION OF THE VIOLATION OF DUE
PROCESS ENTITLES PETITIONER TO REINSTATEMENT.
IN ANY EVENT, PETITIONER IS ENTITLED TO HIS SALARIES
FROM RECEIPT BY PRIVATE RESPONDENT OF THE
DECISION OF THE LABOR ARBITER ON 4 FEBRUARY 1991
TO (sic) AT LEAST THE PROMULGATION OF THE ASSAILED
RESOLUTION ON (sic) 16 JULY 1992.
IN ANY EVENT, PETITIONER IS ALSO ENTITLED TO HIS
UNUSED VACATION LEAVE AND PROPORTIONATE 13TH
MONTH PAY IN THE TOTAL AMOUNT OF P24,866.66,
ADJUDGED BY THE LABOR ARBITER.
THE AWARD OF MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES BY THE LABOR ARBITER IS JUSTIFIED.
We affirm with modification the impugned Resolution.
At the outset, we note that the Petition was not accompanied by a
certified true copy of the assailed July 16, 1992 NLRC
Resolution, 3 in violation of Revised Circular No. 1-88. Neither
was there any certification under oath that "petitioner has not
commenced any other action or proceeding involving the same
issues in the Supreme Court, the Court of Appeals or different
Divisions thereof, or any other tribunal or agency, and that to the
best of his knowledge, no such action or proceeding is pending in
the Supreme Court, the Court of Appeals, or different Divisions
thereof or any other tribunal or agency," as required
under Circular No. 28-91. It is settled that non-compliance with
the provisions of Revised Circular No. 1-88 and Circular No. 28-
91, would result in the outright dismissal of the petition. 4
In addition, under Rule 65 of the Revised Rules of Court, the
special civil action for certiorari is available in cases where the
concerned "tribunal, board or officer exercising judicial functions
had acted without or in excess of its jurisdiction, or with grave
abuse of discretion and there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of law." In Antonio
v. National Labor Relations Commission, 5 we held that the plain
and adequate remedy expressly provided by law is a motion for
reconsideration of the assailed decision, and the resolution
thereof, which is not only expected to be but would actually have
provided adequate and more speedy remedy than a petition
for certiorari. The rationale for this requirement is to enable the
court or agency concerned to pass upon and correct its mistakes
without the intervention of a higher court. 6 In this case, the
assailed July 16, 1992 Resolution of the National Labor Relations
Commission was received by petitioner's counsel on July 23,
1992. 7 Petitioner did not file a motion for reconsideration,
instead, he commenced this special civil action for certiorari. Be
that as it may, we allowed the petition to enable us to rule on the
significant issues raised before us, viz.: (1) whether or not
petitioner's right to procedural due process was violated, and (2)
whether or not he was dismissed for a valid or just cause.
The procedure for terminating an employee is found in Article 277
(b) of the Labor Code, viz.:
xxx xxx xxx
(b) Subject to the constitutional right of workers to security of
tenure and their right to be protected against dismissal except for
a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code the employer
shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes
for termination and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of his counsel if
he so desires in accordance with company rules and regulations
promulgated pursuant to guidelines set by the Department of
Labor and Employment. Any decision taken by the employer shall
be without prejudice to the right of the worker to contest the
validity or legality of his dismissal by filing a complaint with the
regional branch of the National Labor Relations Commission. The
burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. . . . (emphasis
supplied)
This procedure protects not only rank-and-file employees but also
managerial employees. Both have the right to security of tenure
as provided for in Section 3, Article XIII of the 1987 Constitution.
In the case at bench, petitioner decided to seek reconsideration
of the termination of his service thru his August 16, 1989 letter.
While admitting his error, he felt that its gravity did not justify his
dismissal. Considering this stance, and in conformity with the
aforequoted Article 277 (b) of the Labor Code, petitioner should
have been formally charged and given an opportunity to refute
the charges. Under the facts in field, we hold that petitioner was
denied procedural due process.
We now come to the more important issue of whether there was
valid cause to terminate petitioner.
Petitioner claims that his alleged immoral act was
unsubstantiated, hence, he could not be dismissed. We hold
otherwise. The records show that petitioner was confronted with
the charge against him. Initially, he voluntarily agreed to be
separated from the company. He took a leave of absence
preparatory to this separation. This agreement was confirmed by
the letter to him by Mr. Prieto dated August 7, 1989. A few days
after, petitioner reneged on the agreement. He refused to be
terminated on the ground that the seriousness of his offense
would not warrant his separation from service. So he alleged in
his letter to Mr. Prieto dated August 16, 1989. But even in this
letter, petitioner admitted his "error" vis-a-vis Miss Gonzaga. As a
manager, petitioner should know the evidentiary value of his
admissions. Needless to stress, he cannot complain there was no
valid cause for his separation.
Moreover, loss of trust and confidence is a good ground for
dismissing a managerial employee. It can be proved by
substantial evidence which is present in the case at bench. As
further observed by the Solicitor General:
. . . assuming arguendo that De Jesus and Gonzaga were
sweethearts and that petitioner merely acceded to the request of
the former to drop them in the motel, petitioner acted in collusion
with the immoral designs of De Jesus and did not give due regard
to Gonzaga's feeling on the matter and acted in chauvinistic
disdain of her honor, thereby justifying public respondent's finding
of sexual harassment. Thus, petitioner not only failed to act
accordingly as a good father of the family because he was not
able to maintain his moral ascendancy and authority over the
group in the matter of morality and discipline of his subordinates,
but he actively facilitated the commission of immoral conduct of
his subordinates by driving his car into the motel.
(Comment, April 29, 1993, p. 9)
As a managerial employee, petitioner is bound by a more
exacting work ethics. He failed to live up to this higher standard of
responsibility when he succumbed to his moral perversity. And
when such moral perversity is perpetrated against his
subordinate, he provides justifiable ground for his dismissal for
lack of trust and confidence. It is the right, nay, the duty of every
employer to protect its employees from over sexed superiors.
Petitioner is not also entitled to moral and exemplary damages.
There was no bad faith or malice on the part of private
respondent in terminating the services of petitioner. 13
Petitioner is entitled, however, to his unused vacation/sick leave
and proportionate 13th month pay, as held by the labor arbiter.
These are monies already earned by petitioner and should be
unaffected by his separation from the service.
WHEREFORE, premises considered, the assailed resolution of
public respondent is hereby AFFIRMED WITH MODIFICATION
that the award of separation pay is DELETED. Private respondent
is ordered to pay petitioner the amount of P1,000.00 for non-
observance of due process, and the equivalent amount of his
unused vacation/sick leave and proportionate 13th month pay. No
pronouncement as to costs.
SO ORDERED.

To be sure, employers are given wider latitude of discretion in

terminating the employment of managerial employees on the
ground of lack of trust and confidence. 8

We next rule on the monetary awards due to petitioner. The

public respondent erred in awarding separation pay of
P17,000.00 as indemnity for his dismissal without due process of
law. The award of separation pay is proper in the cases
enumerated under Articles 283 and 284 of the Labor Code, 9 and
in cases where there is illegal dismissal (for lack of valid cause)
and reinstatement is no longer feasible. But this is not to state
that an employer cannot be penalized for failure to give formal
notice and conduct the necessary investigation before dismissing
an employee. 10Thus, in Wenphil vs. NLRC 11 and Pacific Mills,
Inc. vs. Alonzo, 12 this Court awarded P1,000.00 as penalty for
non-observance of due process.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 74562 July 31, 1987
PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION and
LAZARO R. SANTOS, respondents.
PARAS, J.:
This is a petition for review on certiorari of the April 30, 1986
Decision of the National Labor Relations Commission in Case No.
NLRC-NCR-2-636-85 entitled Lazaro R. Santos v. Philippine
Long Distance Telephone Company, reversing the July 16, 1985
Decision of the Labor Arbiter by reinstating Lazaro R. Santos with
three (3) months back wages.
On March 28, 1983, herein private respondent was employed by
the herein petitioner as a Junior Telephone Installer with a
monthly salary of P810.00 plus P350.00 monthly living allowance.
His duties, among other things, were to install and repair
telephones.
On May 20, 1984, private respondent was assigned to repair
telephone No. 50-34-06 installed at 1639 Neptune Street, Fable
Estate, Paco, Manila, subscribed by Mr. Remegio Perez. After
inspecting the telephone wirings, respondent allegedly told Mrs.
Remedios Perez that it would take time to repair the telephone
since the defect involves cable replacement. When asked by Mrs.
Remedios Perez how the cable can be repaired, he answered
that there are personnel duly assigned to work on cables but
expressed willingness to make the repair himself provided he is
paid P160.00 for cable replacement and service charges. Unable
to decide for herself, Mr . Remedios Perez requested respondent
to come back the next day at 7:00 p.m., but as it was beyond
private respondent's office hours, the latter gave Mrs. Perez his
telephone number with the advice that he could be contacted
between 12:00 p.m. to 1:00 p.m. and that such transaction should
not be divulged to anybody because it is confidential.
Subsequently, Mr. Remigio Perez sent a letter complaint dated
May 24, 1984 to the petitioner denouncing respondent for
demanding P160.00 from his daughter-in-law, Mrs. Remedios
Perez, for the immediate repair of their telephone. This prompted
the petitioner to dispatch Engineers Melanio Poce and Fidel
Paulino to conduct an on the spot inspection of telephone No. 50-
34-06 and it was ascertained that the real trouble was a slash on
the portion of the inside wire which was easily restored by
connecting the jumper wire to the terminal and by changing a
portion of the inside wire.
Mrs. Remedios Perez appeared before petitioner's Quality
Control and Inspection Department (QCID) in the afternoon of
May 24, 1984 and gave a sworn statement pointing to the
respondent as the person who demanded P160.00 from her for
cable replacement and service charge in connection with the
repair of telephone No. 50-34-06; and executed a "KATUNAYAN"
dated May 24, 1984 where she positively Identified respondent as
the person who demanded P160.00 for repair of their telephone.
On May 29, 1984, a confrontation among private respondent,
Mrs. Remedios Perez, Mr. Reynaldo Perez and Mr. Rufino dela
Cruz was conducted and during the confrontation, Mr. and Mrs.
Reynaldo Perez reiterated that respondent demanded P160.00
for the repair of their telephone. Subsequently, Mr. Nicanor
Sacdalan, petitioner's OPSIM I Manager, sent a letter dated July
9, 1984 to respondent requiring the latter to explain within 72
hours from receipt thereof why he should not be dismissed from
the service for demanding personal compensation for the
services rendered to the subscriber in connection with his
telephone. In reply thereto, respondent submitted a written
explanation dated July 13, 1984 denying the accusation against
him. However, petitioner having been convinced that respondent
committed the offense imputed against him, terminated the
services of the latter effective October 6, 1984. But three (3)
weeks after petitioner had terminated the services of respondent,
Messrs. Remigio Perez and Reynaldo Perez, and Mrs. Remedios
Perez executed affidavits of retraction dated November 2, 1984,
November 12, 1984 and November 8, 1984, respectively.
On February 26, 1985, private respondent filed a complaint for
illegal dismissal against petitioner before the Arbitration Branch of
the National Labor Relations Commission, docketed therein as
NLRC-NCR-2-636-85 (Rollo, pp. 2-14).
In a Decision dated July 16, 1985, Labor Arbiter Bienvenido
Hernandez dismissed the complaint for lack of merit (Ibid., pp. 16-
22). The dispositive portion of the said Decision, reads:
WHEREFORE, judgment is hereby rendered holding and
adjudging complainant's dismissal from the service of respondent
legal and must be, as it is hereby sustained. The dismissal of
complainant should therefore receive the seal of approval by this
Office. The case is dismissed for lack of merit with prejudice.
SO ORDERED.
On appeal, the National Labor Relations Commission in a
Decision dated April 30, 1986, reversed the Labor Arbiter (Rollo,
pp. 23-25). The dispositive portion of which, reads:
WHEREFORE, respondent is hereby directed to reinstate
complainant Lazaro R. Santos with three (3) months back wages
within ten (10) days from finality thereof.
SO ORDERED.
Hence, the present petition (Ibid, pp. 2-14).
The Second Division of this Court, in a Resolution dated June 2,
1986, resolved to require the respondents to comment; and to
issue a temporary restraining order (Ibid, p. 26).
In compliance with the above-said Resolution, private respondent
filed his Comment on June 20, 1986 (Ibid, pp. 3234); while public
respondent filed its Comment on September 25, 1986 (Ibid, p. 45-
53).
Petitioner filed its Reply on November 24, 1986 (Rollo, pp. 58-63)
in compliance with the Resolution of October 15, 1986 (Ibid, P.
55).
The petition was given due course in the Resolution of February
9, 1987 and the parties were required to file their respective
memoranda (Ibid, p. 64).
On March 2, 1987, public respondent, through counsel, filed a
Manifestation and Motion praying that its Comment of September
19, 1987 be considered as its memorandum (Ibid, pp. 67-88).
On March 6, 1987, private respondent filed his Memorandum
(Ibid, pp. 69-73) while petitioner filed its Memorandum on April 1,
1987 (Ibid, pp. 77-78).
The sole issue in this case is —
WHETHER OR NOT PRIVATE RESPONDENT WAS ILLEGALLY
DISMISSED FROM HIS EMPLOYMENT BY PETITIONER.
The instant petition is impressed with merit.
NLRC, in ordering the reinstatement of private respondent with
three (3) months back wages, relied solely on the affidavits of
retraction of Mr. Remigio Perez, Mr. Reynaldo Perez and Mrs.
Remedios Perez, which were executed nearly one (1) month after
petitioner terminated private respondent's services.
NLRC's pronouncement was to the effect that what transpired
between private respondent and Mr. and Mrs. Reynaldo Perez
was a simple case of misunderstanding; that the said spouses
overly reacted by the frequent trouble in their telephone line and
the failure of private respondent to immediately bring the same to
its normal operation, so that, in view of the fact that the charge
was not true, private respondent's detractors executed the
affidavits of retraction. On the whole, NLRC found private
respondent's discharge to be without a solid foundation.
After a careful review of the records, it appears more reasonable
to believe that the affidavits of retraction were, as claimed by
petitioner, a mere afterthought, executed out of compassion to
enable private respondent to extricate himself from the
consequence of his malfeasance. As such, this Court ruled in
People v. Rojo, that said affidavits have no probative value (114
SCRA 304, May 31, 1982).
More specifically, in the case of People v. Galicia (1 23 SCRA
556, July 25, 1983, citing the case of People v. Ubina, 97 Phil.
515), this Court in sustaining the action of the lower court in
brushing aside the affidavit of retraction executed by complaining
witness, ruled:
... it would be a dangerous rule for courts to reject testimonies
solemnly taken before the courts of justice simply because the
witnesses who had given them later on changed their mind for
one reason or another for such a rule would make solemn trials a
mockery and place the investigation of truth at the mercy of
unscrupulous witnesses.
Accordingly, full faith and credit should have been given to the
letter-complaint of Mr. Remigio Perez, to the sworn statement of
Mr. Reynaldo Perez and Mrs. Remedios Perez, and the
"KATUNAYAN" executed by Mrs. Remedios Perez. Conversely,
their affidavits of retraction should have been disregarded.
The other pronouncement of public respondent that private
respondent's dismissal from his employment was effected without
petitioner complying with the provisions of Sections 1, 2 and 5 of
Rule XIV of the Rules implementing Batas Pambansa Blg. 130, is
likewise devoid of merit. Said Rule provides:
SEC. 1. Security of tenure and due process. — No worker shall
be dismissed except for a just or authorized cause provided by
law and after due process.
SEC. 2. Notice of Dismissal. — Any employer who seeks to
dismiss a worker shall furnish him a written notice stating the
particular acts or omission constituting the grounds for his
dismissal. In case of abandonment of work, the notice shall be
served at the worker's last known address.
xxx xxx xxx
SEC. 5. Answer and hearing. — The worker may answer the
allegations stated against him in the notice of dismissal within a
reasonable period from receipt of such notice. The employer shall
afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desire.
From the evidence presented it was established that private
respondent was dismissed from the service for a just cause he
willfully committed a serious act of misconduct by demanding
P160.00 for the repair of telephone No. 56-34-06. Among others,
it was shown that the letter-complaint of Mr. Remigio Perez was
followed by an investigation conducted by Engineers Melanio
Poce and Fidel Paulino who ascertained that the trouble was a
mere slash on the portion of the inside wire, contrary to private
respondent's assertion that it was cable trouble necessitating
cable replacement and other expenses. Subsequently, Mrs.
Remedios Perez appeared before petitioner's Quality Control and Moreover, the alleged illegality of private respondent's dismissal
Inspection Department in the afternoon of May 24, 1984 and gave because of petitioner's failure to secure clearance from the
a sworn statement pointing to the private respondent as the Department of Labor before effecting his dismissal, no longer
person who demanded P1 60. 00 from her for cable replacement holds true in this case.
and service charge. She executed further a "KATUNAYAN" dated
May 24, 1984 where she positively Identified respondent as the Article 278 (b) of the Labor Code of the Philippines, as amended
person who demanded P160.00 for the repair of their telephone. by Sections 13 and 14, Batas Pambansa Blg. 130, now provides:
Still later on May 29, 1984, it was followed by a confrontation
among private respondent, Mrs. Remedios Perez, Reynaldo Subject to the constitutional right of workers to security of tenure
Perez and Mr. Rufino dela Cruz wherein Mr. and Mrs., Reynaldo and their right to be protected against dismissal except for a just
Perez reiterated their charge against private respondent. Finally, or authorized cause and without prejudice to the requirement of
giving private respondent his chance to be heard, Mr. Nicanor notice under Article 284 of this Code, Clearance To Terminate
Sacdalan, petitioner's OPSIM I Manager, sent a letter dated July employment shall no longer be necessary.
9, 1984 to the respondent requiring him to explain within 72 hours
from receipt thereof why he should not be dismissed from the
As the above-mentioned amendment took effect on August 21,
service for demanding personal compensation for service
1981, and private respondent's dismissal from the service was on
rendered to the subscriber in connection with the latter's
October 16, 1984, it is clear that petitioner is no longer bound to
telephone, to which private respondent in a letter dated July 13,
secure clearance from the Department of Labor before it can
1984, merely denied the accusation without submitting the
validly dismiss private respondent.
affidavits of retraction in question until much later, after he was
dismissed from the service.
PREMISES CONSIDERED, the April 30, 1986 Decision of the
National Labor Relations Commission is hereby REVERSED and
Moreover, he never requested for a formal investigation; so that
the July 16, 1985 Decision of the Labor Arbiter is hereby
petitioner, convinced that private respondent committed the
REINSTATED.
offense imputed against him, terminated his services effective
October 16, 1984.
SO ORDERED.
It is thus apparent, that the justness of the cause of the dismissal
as well as compliance with procedural requirements, is beyond
dispute. The disciplinary action of dismissal against private
respondent is legally justified considering that his continuance in
the service is patently inimical to the interest of the petitioner. As
held by this Court, an employer cannot be legally compelled to
continue with the employment of a person guilty of malfeasance
(National Service Corporation v. Leogardo Jr., 130 SCRA 502,
July 20, 1984). Reinstatement of an employee dismissed due to
breach of trust and confidence would be oppression (University of
the East v. NLRC, 140 SCRA 296, November 22, 1985).
 FIRST DIVISION (Maynilad) alleging that she entered into an agreement with petitioner
Jesus B. Lopez, Maynilads Senior Engineering Assistant assigned in
JESUS B. LOPEZ, G.R. No. 167385 the Sampaloc area, to repair her water meter for a fee. Despite
Petitioner, payment of P500, petitioner allegedly never returned to fix the
Present:
defective meter.
Davide, Jr., C.J. (Chairman),
- versus - Quisumbing,
Ynares-Santiago, On April 22, 1998, Maynilads Head of Technical Operations-
Carpio, and
Sampaloc Sector issued a memorandum requiring petitioner to
Azcuna, JJ.
NATIONAL LABOR RELATIONS answer the allegations.[4]
COMMISSION (NLRC) SECOND
DIVISION, HON. COMMISSIONERS Petitioner denied the charges against him. He claimed that he
ANGELITA GACUTAN, VICTORIANO
CALAYCAY, RAUL AQUINO, never received any amount from Gopez and even advised her to file
MAYNILAD WATER SERVICES, a proper job order for her meter concerns.[5]
INC., BENJAMIN REYES and Promulgated:
CRISTINA M. BONIFACIO,
Respondents. December 13, 2005 Maynilad also formed an Ad-Hoc Investigation Panel which

x ---------------------------------------------------------------------------------------- recommended petitioners dismissal from the service based on its

x
findings that petitioner committed serious misconduct in contracting

DECISION an unauthorized work for a fee.[6] Thus, on September 10, 1998,

petitioner was served a notice of termination.[7]

YNARES-SANTIAGO, J.:
Aggrieved, petitioner filed a complaint for illegal dismissal

This petition for review on certiorari under Rule 45 of the Rules
of Court, seeks the reversal of the January 5, 2005 Decision [1]
Court of Appeals in CA-G.R. SP No. 81543, and its March 4, 2005
Resolution[2] denying the petitioners motion for reconsideration.
The antecedent facts show that on April 21, 1998, Regina M.
Gopez wrote a letter[3] to respondent Maynilad Water Services, Inc.
claiming that he was dismissed without just cause.
of the
On January 30, 2002, the labor arbiter[8] rendered a
Decision[9] holding that Lopez was illegally dismissed as there was no
proof that he promised to work on the waterline of Gopez, much less
that he received money from the latter. The dispositive portion of the
decision reads:
 The NLRC found that petitioner entered into a contractual
WHEREFORE, judgment is hereby rendered
declaring the dismissal of the complainant as illegal agreement with Gopez and that he received money from the latter
and ordering respondent company to immediately
reinstate him to his former position without loss of through Carreon, his conduit. However, the NLRC also held that
seniority rights and to pay complainant full
backwages and attorneys fees, as follows: petitioners infraction was not tantamount to serious misconduct as

1. P537,030.00 representing backwages as Maynilad did not suffer any pecuniary loss. If at all, petitioner violated
of the date of this decision until
complainant is actually reinstated in Maynilads policy on conflict of interest which is a ground for dismissal
the service; and,
based on loss of trust and confidence.
2. 10% of the total judgment award in this
case representing attorneys fees.

The complaint for moral and exemplary Petitioners motion for reconsideration was denied,[13] hence
damages are hereby disallowed for want of merit.
he filed a petition for certiorari under Rule 65 of the Rules of Court
SO ORDERED.[10]
before the Court of Appeals.

On appeal, the National Labor Relations Commission (NLRC) set

aside the decision of the labor arbiter. The dispositive portion of the
Resolution[11] reads:
WHEREFORE, the assailed Decision of the
Labor Arbiter ordering the reinstatement of
complainant with backwages and payment of
attorneys fees is ordered SET ASIDE. A new one is
hereby entered declaring the dismissal of
complainant legal. However, as a measure of
compassionate justice, respondent is ordered to pay
complainant the sum of P13,260.00 by way of
financial assistance.
SO ORDERED.[12]
On January 5, 2005, the Court of Appeals rendered a
Decision[14] dismissing the petition and affirming the resolution of the
NLRC. According to the appellate court:
Petitioner entered in a contract to work for a
fee with a customer (Mrs. Gopez) contrary to
company policy. Such dishonesty is tantamount to
serious misconduct on the part of the employee, a
breach of trust reposed upon him by his employer.
Loss of confidence can be a ground for dismissing an
employee when there is basis for the same as it is in
this case, or when the employer has reasonable
ground to believe, if not, entertain, the moral
conviction that the employee is responsible for the
misconduct and that the nature of his participation
 therein renders him unworthy of the trust and
confidence demanded by his position. Factual findings of the NLRC and the Court of Appeals that

Maynilad expected petitioner to project a petitioner contracted unauthorized work and accepted money from
credible and professional image to the public being
Gopez for the repair of the water meter deserves respect and even
the head of a service team. However, contrary to
expectations, petitioner committed a misconduct by finality. Settled is the rule that only questions of law may be raised in
entering into a prohibited contract with a customer.
Thus, Maynilad could not be faulted in losing its trust a petition for review under Rule 45 of the Rules of Court.
and confidence in petitioner and in dismissing him
under the circumstances.[15]

When petitioner contracted with Gopez, he in effect engaged

Petitioner sought reconsideration of the appellate courts in a business that competed with Maynilads and thus came in conflict

decision but the same was denied.[16] of interest with the latter. He cannot serve himself and his employer at

the same time all at the expense of the latter.[20]

The principal issue for our resolution is the validity of petitioners

termination. As a measure of self-preservation against acts inimical to its

interests, an employer has the right to dismiss an employee found

Misconduct has been defined as improper or wrong conduct.
It is the transgression of some established and definite rule of action, committing acts of dishonesty and disloyalty. The employer may not
a forbidden act, a dereliction of duty, willful in character, and implies be compelled to continue to employ such a person whose continuance
wrongful intent and not mere error of judgment.[17] The misconduct to
in the service would patently be inimical to his employers
be serious must be of such grave and aggravated character. Such
misconduct, however serious, must nevertheless be in connection interest.[21] The law, in protecting the rights of workers, authorizes
with the employees work to constitute just cause for his
neither oppression nor self-destruction of the employer.[22] Thus,
separation.[18] Thus, for misconduct or improper behavior to be a just
cause for dismissal, (a) it must be serious; (b) must relate to the in Philippine Long Distance Telephone Company v. National Labor
performance of the employees duties; and, (c) must show that the Relations Commission,[23] a junior telephone installer was dismissed
employee has become unfit to continue working for the employer.[19]
from service for just cause when he willfully committed a serious act
of misconduct by demanding money for the repair of a telephone that regardless of whether the act caused damage to the company. Thus,

was officially part of his job. we hold that Maynilad validly terminated the services of petitioner on

In the instant case, we find the penalty of dismissal from the ground of serious miconduct which resulted to the loss of trust of

service reasonable and appropriate and a valid exercise of Maynilad upon petitioner because his credibility in doing his job as a

management prerogative. Maynilad specifically prescribes that, team leader of a repair crew has already been eroded.

should any employee begin or continue to engage in conflict of interest

activities despite management pronouncement or disapproval, the As regards the amount of P13,260 awarded to petitioner by

appropriate disciplinary sanctions shall be imposed on way of financial assistance, the same must be deleted for lack of basis.

him.[24] Appropriate disciplinary sanction, such as termination, is within Financial assistance may be given as a measure of social justice in

the purview of management imposition. exceptional circumstances and as an equitable concession. It is

allowed only in those instances where the employee is validly

That Maynilad suffered no damage resulting from the acts of dismissed for causes other than serious misconduct or those reflecting

petitioner is inconsequential. In Glaxo Wellcome Philippines, Inc. v. on his moral character.[27]

Nagkakaisang Empleyado ng Wellcome-DFA (NEW-DFA),[25] we held

WHEREFORE, the petition is DENIED. The January 5, 2005
that deliberate disregard or disobedience of company rules could not
Decision and the March 4, 2005 Resolution of the Court of Appeals in
be countenanced, and any justification that the disobedient employee
CA-G.R. SP No. 81543, are AFFIRMED with MODIFICATION. The
might put forth would be deemed inconsequential. The lack of
award of P13,260 by way of financial assistance in favor of petitioner
resulting damage was unimportant, because the heart of the charge
is DELETED for lack of basis.
is the crooked and anarchic attitude of the employee towards his

employer. Damage aggravates the charge but its absence does not
SO ORDERED.
mitigate nor negate the employees liability.[26] What is abhorrent and

punishable is the act of contracting unauthorized work for a fee,

SECOND DIVISION
March 11, 2015
G.R. No. 208908
THE COFFEE BEAN and TEA LEAF PILIPPINES, INC. and
WALDEN CU, Petitioners,
vs.
ROLLY P. ARENAS, Respondent.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari1 the challenge
to the Court of Appeals' (CA) decision2 dated March 26, 2013 and
resolution3 dated August 30, 2013 in CA-G.R. SP No. 117822.
These assailed CA rulings affirmed the National Labor Relations
Commission's (NLRC) decision4 dated August 13, 2010, which
also affirmed the Labor Arbiter's (LA) February 28, 2010 decision.
The Antecedent Facts
On April 1, 2008, the Coffee Bean and Tea Leaf Philippines, Inc.
(CBTL) hired Rolly P. Arenas (Arenas) to work as a "barista" at its
Paseo Center Branch. His principal functions included taking
orders from customers and preparing their ordered food and
beverages.5 Upon signing the employment contract,6 Arenas was
informed of CBTL’s existing employment policies.
To ensure the quality of its crew’s services, CBTL regularly
employs a "mystery guest shopper" who poses as a customer, for
the purpose of covertly inspecting the baristas’ job performance.7
In April 2009, a mystery guest shopper at the Paseo Center
Branch submitted a report stating that on March 30, 2009, Arenas
was seen eating non-CBTL products at CBTL’s al fresco dining
area while on duty. As a result, the counter was left empty without
anyone to take and prepare the customers’ orders.8
On another occasion, or on April 28, 2009, Katrina Basallo
(Basallo), the duty manager of CBTL, conducted a routine
inspection of the Paseo Center Branch. While inspecting the
store’s products, she noticed an iced tea bottle being chilled
inside the bin where the ice for the customers’ drinks is stored;
thus, she called the attention of the staff on duty. When asked,
Arenas muttered, "kaninong iced tea?" and immediately picked
the bottle and disposed it outside the store.9
After inspection, Basallo prepared a store manager’s report which
listed Arenas’ recent infractions, as follows:
1.Leaving the counter unattended and eating chips in an
unauthorized area while on duty (March 30, 2009);
2.Reporting late for work on several occasions (April 1, 3 and 22);
and
3.Placing an iced tea bottle in the ice bin despite having
knowledge of company policy prohibiting the same (April 28,
2009).10
Based on the mystery guest shopper and duty manager’s reports,
Arenas was required to explain his alleged violations. However,
CBTL found Arenas’ written explanation unsatisfactory, hence
CBTL terminated his employment.11
Arenas filed a complaint for illegal dismissal. After due
proceedings, the LA ruled in his favor, declaring that he had been
illegally dismissed. On appeal, the NLRC affirmed the LA’s
decision.
CBTL filed a petition for certiorari under Rule 65 before the CA.
CBTL insisted that Arenas’ infractions amounted to serious
misconduct or willful disobedience, gross and habitual neglect of
duties, and breach of trust and confidence. To support these
allegations, CBTL presented Arenas’ letter12 where he admitted
his commission of the imputed violations.
On March 26, 2013, the CA issued its decision dismissing the
petition. The CA ruled that Arenas’ offenses fell short of the
required legal standards to justify his dismissal; and that these do
not constitute serious misconduct or willful disobedience, and
gross negligence, to merit his termination from service. The CA
denied CBTL’s motion for reconsideration opening the way for
this present appeal via a petition for review on certiorari.
The main issue before us is whether CBTL illegally dismissed
Arenas from employment.
The Petition
CBTL argues that under the terms and conditions of the
employment contract, Arenas agreed to abide and comply with
CBTL’s policies, procedures, rules and regulations, as provided
for under CBTL’s table of offenses and penalties and/or employee
handbook.13 CBTL cites serious misconduct as the primary
reason for terminating Arenas’ employment. CBTL also imputes
dishonesty on the part of Arenas for not immediately admitting
that he indeed left his bottled iced tea inside the ice bin.
Our Ruling
We DENY the petition.
As a rule, in certiorari proceedings under Rule 65 of the Rules of
Court, the CA does not assess and weigh each piece of evidence
introduced in the case. The CA only examines the factual findings
of the NLRC to determine whether its conclusions are supported
by substantial evidence, whose absence points to grave abuse of
discretion amounting to lack or excess of jurisdiction.14 In the
case of Mercado v. AMA Computer College,15 we emphasized
that:
As a general rule, in certiorari proceedings under Rule 65 of the
Rules of Court, the appellate court does not assess and weigh
the sufficiency of evidence upon which the Labor Arbiter and the
NLRC based their conclusion. The query in this proceeding is
limited to the determination of whether or not the NLRC acted
without or in excess of its jurisdiction or with grave abuse of
discretion in rendering its decision. x x x16 [Italics supplied]
Our review of the records shows that the CA did not err in
affirming the LA and the NLRC’s rulings. No grave abuse of
discretion tainted these rulings, thus, the CA’s decision also
warrants this Court’s affirmation. The infractions which Arenas
committed do not justify the application of the severe penalty of
termination from service.
First, Arenas was found eating non-CBTL products inside the
store’s premises while on duty. Allegedly, he left the counter
unattended without anyone to entertain the incoming customers.
Second, he chilled his bottled iced tea inside the ice bin, in
violation of CBTL’s sanitation and hygiene policy. CBTL argues
that these violations constitute willful disobedience, thus meriting
dismissal from employment.
We disagree with CBTL.
For willful disobedience to be a valid cause for dismissal, these
two elements must concur: (1) the employee’s assailed conduct
must have been willful, that is, characterized by a wrongful and
perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee, and must
pertain to the duties which he had been engaged to discharge.17
Tested against these standards, it is clear that Arenas’ alleged
infractions do not amount to such a wrongful and perverse
attitude. Though Arenas may have admitted these wrongdoings,
these do not amount to a wanton disregard of CBTL’s company
policies. As Arenas mentioned in his written explanation, he was
on a scheduled break when he was caught eating at CBTL’s al
fresco dining area. During that time, the other service crews were
the one in charge of manning the counter. Notably, CBTL’s
employee handbook imposes only the penalty of written warning
for the offense of eating non-CBTL products inside the store’s
premises.
CBTL also imputes gross and habitual neglect of duty to Arenas
for coming in late in three separate instances.
Gross negligence implies a want or absence of, or failure to
exercise even a slight care or diligence, or the entire absence of
care.1avvphi1 It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them.18There is
habitual neglect if based on the circumstances, there is a
repeated failure to perform one’s duties for a period of time.19
In light of the foregoing criteria, we rule that Arenas’ three counts
of tardiness cannot be considered as gross and habitual neglect
of duty. The infrequency of his tardiness already removes the
character of habitualness. These late attendances were also
broadly spaced out, negating the complete absence of care on
Arenas’ part in the performance of his duties. Even CBTL
admitted in its notice to explain that this violation does not merit
yet a disciplinary action and is only an aggravating circumstance
to Arenas’ other violations.20
To further justify Arenas’ dismissal, CBTL argues that he
committed serious misconduct when he lied about using the ice
bin as cooler for his bottled iced tea. Under CBTL’s employee
handbook, dishonesty, even at the first instance, warrants the
penalty of termination from service.21
For misconduct or improper behavior to be a just cause for
dismissal,
(a) it must be serious; (b) it must relate to the performance of the
employee’s duties; and (c) it must show that the employee has
become unfit to continue working for the employer.22
However, the facts on record reveal that there was no active
dishonesty on the part of Arenas. When questioned about who
placed the bottled iced tea inside the ice bin, his immediate
reaction was not to deny his mistake, but to remove the bottle
inside the bin and throw it outside. More importantly, when he
was asked to make a written explanation of his action, he
admitted that the bottled iced tea was his.
Thus, even if there was an initial reticence on Arenas’ part, his
subsequent act of owing to his mistake only shows the absence
of a deliberate intent to lie or deceive his CBTL superiors. On this
score, we conclude that Arenas’ action did not amount to serious
misconduct.
Moreover, the imputed violations of Arenas, whether taken singly
or as a whole, do not necessitate the imposition of the strict and
harsh penalty of dismissal from service. The LA, NLRC and the
CA all consistently ruled that these offenses are not grave
enough to qualify as just causes for dismissal. Factual findings of
the labor tribunals especially if affirmed by the CA must be given
great weight, and merit the Court’s respect.
As a final remark, we note that petitioner Walden Chu (Chu)
should not be held jointly and severally liable with CBTL for
Arenas’ adjudged monetary awards.1âwphi1 The LA and the
NLRC ruled for their solidary liability but the CA failed to dispose
this issue in its decision.
A corporation is a juridical entity with a legal personality separate
and distinct from those acting for and in its behalf and, in general,
from the people comprising it.23 Thus, as a general rule, an officer
may not be held liable for the corporation's labor obligations
unless he acted with evident malice and/or bad faith in dismissing
an employee.24

In the present case, there was no showing of any evident malice

or bad faith on Chu's part as CBTL's president. His participation
in Arenas' termination was not even sufficiently alleged and
argued. Hence, he cannot be held solidarily liable for CBTL' s
liabilitiesArenasto .

WHEREFORE, in light of these considerations, we hereby DENY

the petition for lack of merit. The Court of Appeals committed no
grave abuse of discretion in its decision of March 26, 2013 and its
resolution of August 30, 2013 in CA-G.R. SP No. 117822, except
with respect to the liability of petitioner Walden Chu. We thus
absolve petitioner Walden Chu from paying in his personal
capacity the monetary awards of respondent Rolly P. Arenas. No
costs.

SO ORDERED.